FINANCIAL PREPARATION. The first step in the home search process will be to decide if you are in a position to pay cash or if you’ll need to obtain a loan. It starts with knowing your finances. This includes a full analysis of what you can afford on a monthly basis, the amount of your down payment (if you are getting a loan), and how much you want to pay overall.
There are many types of loans, and it’s very important to meet with a reputable lender who can explain the types of loans to you and make suggestions as to what is the best fit. Some people may need to work on their credit scores before being approved for a loan, so it’s a good first step to do a deep dive on your financial status before looking for homes. A reputable lender will help with this.
If you don’t need a loan and intend to pay all cash, you’ll need to provide a proof of funds document, generally a bank statement, showing sufficient funds to close escrow, including purchase price and closing costs.
SEARCH PREPARATION. Before you start searching, decide what you are looking for in a home and on what you are willing to compromise.
Factors to look at may include a home's location, architectural style, number of bedrooms and bathrooms, proximity to neighbors, and outdoor space/lot size. Another factor to address is how much work you are willing to do to a home. Some people are interested in spending time and money to customize a home, while others want a turnkey property.
Your home is an investment, so it’s important to buy, not just with an eye to what you want in a home, but the value of the property long term. Plans can change especially in our mobile world so the investment angle of the purchase must also be considered.
2. Making an offer
The Residential Purchase Agreement (also known as RPA) is the contract that the California Association of Realtors® has created for the purchase of residential property. Zamira regularly attend intensive contract classes and meetings so that they may better explain key aspects of the contract. It’s important, As you begin the purchase process and make an offer to purchase a home, it is important to carefully review each aspect of the contract. This is the time to ask any questions that you might have.
The contract contains contingencies, which allow the buyer to cancel the contract based on certain conditions. When you write an offer on a property, there will be a time period for you to investigate the property, obtain financing, verify the value of the property, and also exit the contract, if needed, without penalty.
Contingency clauses include: Physical Investigation Contingency, Property Investigation, Title Report, Seller Disclosures, 9A/Municiple Report, C.LU.E. Report (Combined Loss Underwriting Exchange), Loan Contingency and Appraisal Contingency.
3. Escrow, Inspections & Appraisal
The escrow company is a neutral third party with the responsibility of overseeing the contract to make certain that no funds or property will change hands until all conditions of the purchase contract have been met. The escrow company also ensures that the interests of all parties to the transaction are protected.
The escrow company is determined and agreed upon between the buyer and seller (this is a negotiable item as with all the other terms of the contract). Upon acceptance of the RPA by buyer and seller, the escrow process begins, and the contract is now officially active. Agents will provide the purchase agreement to the escrow holder and include the contact information for all parties. The escrow holder then reviews the contract, reaches out to the buyer and seller and provides wire instructions for the buyer’s earnest money deposit, which is typically 3% of the purchase price.
The earnest money deposit is due into escrow no later than three business days from acceptance and is held in-trust by the escrow company.
After reviewing the contract, the escrow officer will prepare the escrow instructions. These instructions outline the duties of the escrow holder, including those set forth in the RPA, incorporate the legal description of the subject property, and include the contingency dates as agreed upon in the contract. The escrow holder will generate opening packages that contain documents that need to be signed, completed, and at times, notarized. The opening package is to be returned to escrow within 5 days of receipt. Escrow is happy to help guide you through the package. The escrow officer will also open a title order, if not already done by the listing agent, and will review the preliminary title report. Escrow will work with the seller and the title company to ensure that clear title will pass to the buyer at the close of escrow. This means all encumbrances, liens, property taxes, or other obligations that may be against the property will be paid.
The escrow holder works with every party in the transaction and is a great resource to go to with any questions, updates, or concerns.
The closing date (the target date to close the transaction and transfer ownership) is determined by the buyer and seller when the parties have agreed to and accepted the terms of the purchase agreement. This date may be amended by mutual agreement.
The escrow and title company will confirm the final details of the transaction, order the title insurance policy as called for in the purchase contract, and release the file for recording (also known as “closing”), with the county recorder’s office for the next business day.
Close of escrow happens when the notarized grant deed that the seller has signed is recorded at the county recorder’s office. This deed transfers title of the property from the seller to the buyer.
Upon the escrow holder’s confirmation from the county recorder’s office that the file has closed, the escrow officer will notify all parties. Keys are exchanged between agents, seller, and buyer.
The escrow holder will then process the closing, balance the final figures of the file, disburse the funds accordingly (including any refunds to the buyer), and generate and disburse the final closing statements.
5. The Future
Consider Zamira and Compass an ongoing resource for everything related to your home as well as other referrals taking advantage of Zamira’s deep-rooted connections in Marin.
Whether you're ready to sell, buy, or are looking for answers, let Zamira guide you!