Top 5 things you should know about the (CA) Home Buying Process

    One of the first things I do when I have a new buyer client, is to sit down and meet with them and explain the home buying process. Whether it’s your first purchase, or it’s just been some time since your last purchase, this can be very helpful to know what the expect on the curvy road to the finish line of closed escrow. I’d be happy to meet in person with you too, and in the meantime here’s the top 5 things you should know about the home buying process:

    The top questions I get asked relate to timelines, and money. So let’s look at both but first MY two major rules of real estate to always keep in mind:

    1. Everything is negotiable. Everything whether it be timelines, monies, or contingencies or terms.

    2. The contract is our guide; meaning everything must be in writing in the contract. Everything.

    Okay now that we’ve got that covered, let’s review the buying process and then I’ll highlight my top tips and things you ought to know about the home buying process:

    TIMELINES

    • WHEN WILL I KNOW IF THEY ACCEPT MY OFFER? When you write an escrow, you typically give the seller 3 days to respond to the offer (just remember rule#1).
    • After the accept the offer and we have a fully executed contract meaning all parties have signed in agreement (which may take several days of negotiations) then the timeline begins.
    • Points of timeline in the contract that are most relevant are:
      • Number of days to get your deposit to escrow (typically 3 days – remember rule #1)
      • Number of days to get your inspections done including hire home inspector, read over the HOA rules, read over the Natural Hazard disclosure report and more inspections (typically 14-17 days – remember rule #1)
      • Number of days to get your loan situated, or the appraisal ordered (typically 14-21 days).
      • Number of days to close escrow (typically 30-45 days)
    • WHAT HAPPENS IF MY DEADLINE IS DUE, BUT I’M NOT READY? We have a responsibility to the contract to do as we said we would, but there can be reasons for delay. One recent example I had is that our investigation contingency was due to be removed, but the home inspector found mold like substance and wanted to send it to the lab to confirm which took more time than we had. You as the buyer have the right to ask for an extension of time. If the seller’s don’t want to grant it to you, then they can send you Notice to Perform which gives you 48 hours to do as the contract says and follow the timelines, and if you don’t the seller has the right to cancel the escrow, perhaps to go find a different buyer. In most cases, if you as the buyer are being reasonable, the seller would rather give you a few more days than start the process all over with a new buyer… unless they have a better back up offer (?)

    MONEY

    • HOW MUCH IS THE DEPOSIT? Remember rule #1 but the “typical” is 1-3% of the purchase price. It can vary by price range, loan amount, and quite honestly just the listing agent and or seller’s random opinion of what they want from you as the buyer. Remember to see above, deposit typically due 3 days after they accept your offer; meaning you don’t need your deposit to write an offer.
    • HOW MUCH DO I NEED FOR DOWN PAYMENT? The lender will give you the exact numbers, but I’m seeing great loan programs for as little as 3% down (that’s correct, the huge majority of us do NOT need 20% down! woo!) Some cases only a 1/2 of a percent down, or even zero down! Ask me to connect you to a lender to look at your specific situation.
    • HOW MUCH ARE THE FEES? Both escrow and the lender work together to give to the exact numbers, but here’s an idea to get you started:
      • Fee to use a realtor to buy a home – free 99% of the time (Remember rule #1).
      • Pre-paids required by the lender: The lender will usually ask you to pre-pay some items for example you may have to pre-pay 4 months worth of property taxes, or you may have to pre-pay 1 year’s worth of home owners insurance. Again, ask the lender for exact fees.
      • Cash up front: any inspector you hire will want to be paid up front this includes the home inspector, and the appraiser (usually $400 – $600 each)
      • Escrow and title has fees too. Your realtor should have the title and escrow companies apps or calculators to give you the fees which will vary by your price range.
      • Other closing costs: again, ask your lender for the estimate as it varies by region.
    • Note too that’s it’s possible to negotiate that the seller pay for some or all of these items for you too…

    DISCLAIMER: I am not able to give legal advise – I am a real estate agent, not an attorney. Also note too the this information is based on my local experience in Orange and San Bernardino and Riverside Counties; customs can vary by area.  CA DRE# 01414653

    Want to talk further? email me at danae@danaeaballi.com

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