Buying a home: A starting point
Many factors influence the price that a seller expects to get for their home. While only you can decide how much you feel comfortable offering for a property, we can gather critical information for you regarding the factors that impact how much you should consider paying for the home. These factors include:
- How long the home has been on the market
- If the price has been reduced
- The prices for other comparable homes in the area
- If there are multiple offers
- Other items that might be included in the sale – furniture, hot tub, etc.
- The “list to sale price ratio,” an indication of how competitive the market is for homes in this area.
- Why the seller is selling
- Whether the seller is offering an assumable loan or financing
Here are some of the current documents you’ll need to get started:
- Current pay stubs
- W-2s or 1099s
- Tax returns, usually for two years
- Bank statements
- Investments/brokerage firm statements
- Net worth of businesses owned (if applicable)
- Credit card statements
- Loan statements
- Alimony/child support payments (if applicable)
- You submit the completed application and any required supporting documentation to the lender
- The lender orders an appraisal of the property, a credit report, and begins verifying your employment and assets
- The lender provides a good faith estimate of closing and related costs, plus initial Truth in Lending disclosures
- The lender evaluates the application and your supporting documents, approves the loan, and issues a letter of commitment
- You sign the closing loan documents and the loan is funded
- The lender sends their funds to escrow
- All appropriate documents are recorded at the County Recorder’s Office, the seller is paid, and the title to the home is yours
Wood Destroying Pest and Organisms (Termite) Inspection
This inspection identifies existing or potential pest, dry rot, fungus and other structure-threatening infestations or conditions. The initial inspection fee covers only those areas which are accessible to the inspector. Inspections of inaccessible areas cost more and are subject to an estimate by the inspector. These inspectors must be licensed and can give estimates to correct noted problems, can make the suggested repairs, and can certify that the work has been completed.
General House Inspection
This inspection identifies material defects in the essential components of the property based upon a noninvasive physical inspection. There are no licensing requirements for someone to be a home inspector. These inspectors are not allowed to give estimates to correct noted problems, nor can the inspector perform any of the repairs.
A title search spells out who has the right of ownership for a property. It is considered “clear” if there are no claims or liens against it. In order to make sure nothing will prevent transfer of the property to you, a title company will conduct a title search and prepare a preliminary title report that indicates what recorded matters affect the title to the property and if the title insurance company is willing to insure the title. At the close of escrow, the title company will issue an Owner’s Policy of Title Insurance to protect you against losses that might arise from covered claims on the title.
A home purchase is a complex transaction involving many parties and associated fees. In addition to your deposit and down payment, there are a variety of other costs involved in the close of escrow, including:
- Loan origination fees, appraisals, and reports
- Surveys and inspections
- Mortgage insurance
- Hazard insurance
- Title Insurance, notary, and escrow fees
- Recording fees and stamps
The lender will provide a good faith estimate of these costs prior to the close of escrow, so that you will know in advance what to expect. Some of these costs may be negotiable items with the seller. Naturally, we’ll walk you through each item in your good faith estimate to make sure you understand every detail.