1. Financing
2. Create the Offer to Purchase
3. Negotiate with the Seller
4. Home Inspection
5. Appraisal
6. Removing Contingencies
7. Escrow Process & Final Settlement

 

1. Financing
   
   The first step in the home buying process is pre-qualification. If you would like to pre-qualify for a loan or would like more information about mortgage financing, please contact some of the professionals listed on the resources page.
   
   
2. Create the Offer to Purchase
   
   Before the offer to purchase is created, it is very important that you have been at least pre-qualified or better yet pre-approved by a lender.
   
   This is one of the best negotiating tools a buyer can have. It shows the seller that you are financially able to purchase the home. After you have found the right home, it is time to prepare the offer.
   
   In California the purchase agreement is an 8 page form that does dual duty as the purchase offer and escrow instructions. It covers all facets of the purchase process, such as: purchase price amount and type of earnest money contingencies (financing, inspection, etc.), personal items you wish the seller to include (washer/dryer, etc.), closing date and a time limit after which the offer will expire.
   
   Once you make the offer, we present it to the Sellers and their Agent. The Seller may accept it, prepare a counter offer, or reject the offer altogether. Once the offer is accepted, it is a legally binding contract.
   
   
3. Negotiate with the Seller
   
   When we find the right home, we will:
   
   
   • Endeavor to discover prices of similar homes sold in the last 6 months
     
   • Help you compare it to any other homes you've looked at
     
   • Evaluate its condition and assess the amount of work it needs
     
   • Determine how long it's been on the market and attempt to discover why the Seller is selling, and if the price has been reduced help you effect a strategy using time, price, and terms to your advantage.
   
   
   We will draw from years of experience in negotiating real estate transactions always with your best interests in mind. Whether it's starting with your best offer, saving room to maneuver, compromising, or making concessions to the seller's counter, we can present you with the objectivity to help you make a wise decision.
   
   
4. Home Inspection
   
   We strongly recommend an inspection for every transaction. Be sure to have something in writing from your inspector that explains the scope of the inspection in detail. Not all inspectors cover the same things.
   
   The home inspection checks the condition of the major systems of the house including the structure's exterior, windows, foundation, roof, garage, electrical, plumbing, heating/air conditioner, attic and basement or crawlspace.
   
   A pest & dry rot inspection is usually available at an additional charge. If any major problems with the structure or systems of the house are uncovered, you will then have the right to void the sales agreement or to renegotiate the terms of the purchase.
   
   A home inspection usually costs between $300 and $600 and is the best money you will ever spend. We have experience with the inspection community and can suggest a list of accredited inspectors.
   
   
5. Appraisal
   
   Your lender will order an appraisal of your home and coordinate with your agent to schedule a time for the appraiser to see the home. The appraisal determines the fair market value of the home and and is submitted to the lender for review.
   
   The average cost is $400 for an owner-occupied home. In the Mammoth market homes often sell for above the appraised price. Talk to your realtor about what this may mean to you.
   
   
6. Removing Contingencies
   
   The dependence upon a stated event which must occur before a contract is binding.
   
   We use computerized tracking systems to accomplish removal of contingencies in a timely manner.
   
   I counsel my clients to carefully consider all aspects of the situation before the contingency is approved as a part of the transaction. Communication and understanding is the key. The following are some possible contingencies:
   • Buyer obtaining loan approval
   • Home Inspection
   • Sale of Buyer's home
   
   
7. Escrow Process & Final Settlement
   
   What is an Escrow?
   
   Escrow is the deposit of documents and funds with a neutral third party with specific instructions as to how they should be disbursed. Escrow acts as the clearing house for the exchange and distribution of those documents and funds in connection with transfer or financing of real property.
   
   You do not need to be in Mammoth for escrow to close. Many transactions are completed via fax and through the mail. The escrow officer, an employee of the escrow company acting as a neutral third party, will explain the documents and have you sign them. The officer will then assure completion of the transaction by delivering the documents to the lender for final verification and document review. Then all documents will be delivered to the county recorders office for final recording, also know as the official “Close of Escrow.”
   
   Why is escrow important to me? Escrow, or the services of a qualified escrow agent, assures all interested parties that the rules and regulations governing real property transfers will be strictly observed by a neutral third party with an objective interest in completing the transaction. An escrow agent represents neither the Seller nor the Buyer. The escrow agent can act only on each party's behalf according to their written instructions.
   
   What escrow services does the title company provide? The basic definition of an escrow agent's responsibility is to accept and hold a deed from the Seller in exchange for funds from the Buyer. The escrow agent will concurrently, when all mutually agreed terms have been satisfied, release the funds to the Seller and deed to the new Buyer. In most sale transactions, this “simple“ process requires the escrow agent to perform the following:
   
   
   • Order a title report on the subject property and obtain all the necessary information to clear all title defects and satisfy existing liens and encumbrances against the property or the principals involved in the sale;
   • Work with the buyer's lender to insure instructions from the seller, buyer and lender are coordinated;
   • Prepare many of the documents necessary for the transaction and review all others to make certain they conform to the parties' demands;
   • Figure tax and interest prorates and prepare closing instructions and statements for both buyer and seller;
   • Arrange closing appointments for all parties to sign the necessary documents;
   • After taking final signatures, the escrow agent has responsibility to complete the transaction by checking all documents for completeness, compliance and accuracy;
   • Return copies of all loan documents to the lender for approval to record;
   • Record all necessary documents in the county where the property is located. This is when the transaction is closed;
   • Disburse all funds out of the escrow account according to the signed, written instructions. (These funds could include the Seller's net proceeds, the Broker's real estate commission, and other payments required for loan approval or to satisfy other terms of the agreement.);
   • Prepare and distribute final closing statements to all interested parties.
   
   How much does an escrow cost and who pays for it?
   
   In a typical sale transaction, the escrow fee is based on the purchase price. In California this fee is traditionally split equally between the Seller and the Buyer. Escrow fees are a negotiable item subject to agreement between the parties. If the sale transaction involves a federally guaranteed VA loan, the Buyer is not allowed to pay any escrow fees and the entire amount will be paid by the Seller.