Considering a home purchase? Thank you for the opportunity to help guide you through your home buying process. It is a process that can be very confusing. This document is a good start to learn the important elements of a home purchase. When we meet, we can answer your questions and go more into the details.
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Finding a good Real Estate Agent
Look for someone
you feel comfortable with. Everyone’s personality fit would be different, yes?
Other helpful qualities: knowledgeable about the area you are interested in;
has the right cutting-edge tools to help locate right properties quickly; has
the right tools to evaluate the value of any property quickly; has the
knowledge and experience to write an appropriate offer; values your time; has
the personality to be an effective advisor, facilitator, negotiator; attentive
to details; has integrity; is open and honest in dealing with everyone. Remember,
there is no cost to the buyer to purchase a home
with the help of a real estate agent.
In fact, most of our agents participate in our 20% rebate to buyers program which can save you thousands of dollars.
Pre-Qualifying and Pre-Approval
When a lender
assesses a borrower's ability to pay for a loan and confirms the maximum loan
amount the borrower can obtain. Sometimes, it is a quick assessment based on the borrower's statement of income (pre-qualification). Sometimes, it is an in-depth assessment which includes a complete loan application paperwork, verifications of assets and an underwriter approval (pre-approval). Pre-qualification is a minimum requirement these days before a seller will review an offer.
Find a lender who is reliable, through your real estate agent or through a good
referral. We can help you with mortgage loans.
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Offer
A proposal to purchase the seller's home. An offer contains all terms and
conditions of your purchase. It stipulates everything that needs to happen
before you will purchase the home, including any contingencies that must be
met. There will be a certain number of days where the buyer must remove all
contingencies or the contract will be cancelled. Typical contingencies include:
Loan,
Appraisal,
Home inspections,
Disclosures,
Sale of Buyer’s property
Contract
An offer becomes a valid contract when both parties mutually agree on all terms
and conditions. A deposit is now required to be deposited into escrow.
Loan Approval
After the
contract is accepted, the major responsibilities of the buyer is to obtain
financing. If you've already been pre-qualified or pre-approved, you are that much closer.
Provide your mortgage broker with the requested paperwork as quickly as possible.
Appraisal - Property Approval
While you are being qualified financially by the lender to make sure that you can meet the monthly mortgage payments, the lender must also be assured that the property you found is also worth the price that you paid. To do so, a licensed appraiser (sometimes two) will give their best assessment of the value of the property. Needless to say, if the property value does not meet the purchase price, there would be things to be worked out.
Disclosures
In California, sellers are obligated to disclose all known material facts
pertaining to the property.
Inspections
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· Termite Inspection
This inspection checks for structural damage due to infestation by wood-destroying pests or organisms, as well as for water and other physical damage. Termite inspectors classify their findings into two categories:
o Section 1 Indicates infestation or damage evident in the property. In most cases, the seller pays for Section 1 repairs.
o Section 2 Indicates that there is not an existing problem, although the potential exists for infestation or damage to the wood structure unless remedies are taken. Usually, preventive maintenance can prevent any damage to the home. In most cases, if Section 2 work is undertaken, the buyer pays the cost.
· Property Inspection
This inspection documents the current state of the property and helps the buyer decide what conditions are acceptable and what are not. A visual inspection should be made that covers all aspects of the house, including electrical, plumbing, appliances, foundation and health and safety issues.
· Roof Inspection
Regardless of the roof's age, the seller is not obligated to replace it unless otherwise agreed upon
Escrow
Escrow is a time period during which the paperwork required for the sale of
real property is processed. An escrow company acts as a neutral party of both
the buyer and seller. The neutral party carries out the provisions of an
agreement or contract. Documents and money are collected and distributed by the
escrow company.
An escrow
ensures that the property or funds will not change hands until all of the
agreement's instructions have been met. An escrow company is obligated to
safeguard funds and documents while in their possession and transfers title and
funds according to the contract.
In Northern California, escrow company is typically also the title insurance company whose business
is to provide a “marketable” title to the buyer.
Contingencies Removal
The buyer removes all contingencies
according to the contract agreement. Upon doing so, the buyer says “Everything
is ok, I am ready to proceed with the purchase without reservation and all
inspections and disclosures are acceptable”.
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Close of Escrow
Official recording of new buyer’s right to the purchased property. About 1 week
before COE, all parties “sign off” on all documents, most importantly the loan
documents. The escrow company receives funds from the buyer and the lender(s) and then
distributes the moneys to all parties, per the contract. The escrow company "records"
the change of ownership at the county record's office. At that moment, the buyer is officially
the owner of the property.
Moving
Planning your move, DMV and post office change of address form; locate moving
company; arrange utilities