|Answers to home sellers'
Q. What are the steps to buying a home?
is the process for buying a home:
1. Check your credit report 3 to 6
months before you plan to buy a home. Clear up any
problems and errors so your credit score will be the best it
2. Call your agent to outline
your requirements for your new home. Before you call,
write a list of what neighborhoods you prefer, how many
bedrooms, how many bathrooms, if you need a family
3. If you have not already spoken
with a lender, you should do so immediately. You need
to know what price home you qualify for. Your lender can
tell you. When you apply for a home loan, ask for a
document called a "Good Faith Estimate". This is a
government-mandated estimate of your actual loan costs.
This should prevent any last minute surprises when your loan
4. Start your home search.
Your agent can provide you with detailed e-mails of all the
listings that match your requirements in your chosen areas. Then you can then go out and look at any or all the homes
you wish to see.
5. Find a home you like! And
decide to make an offer on it.
6. With the help of your
agent, write your offer on the home and
negotiate the terms and conditions of the purchase agreement
7. The seller agrees to accept
8. Your agent will open escrow at
an Escrow Company and deposit your earnest money check.
9. The Escrow Company handles
much of the paperwork involved in completing the sale.
It also keeps all money until the date that both seller and
buyer sign the final paperwork to finish the deal.
Toward the end of the escrow period, you give the down
payment to the escrow company and your lender submits the
loan amount. After all the terms and conditions are
satisfied, and paperwork signed, the escrow company pays the
10. The Grant Deed and other
documents are recorded with the County Recorder -- making
the sale official.
11. Congratulations! You
get the keys and the home is yours!!
Q. What is escrow and why
does it take so long?
A. When a purchase contract has been agreed
to by both buyer and seller, that contract along with the
earnest money are given to the escrow company, an impartial
third party that can only take action based on instructions
from both buyer and seller.
After an escrow account is open, the escrow
officer begins to assemble all documents required to
complete the terms of the contract. For example, the
officer gets current property tax records to determine how
much property tax each party will pay. The escrow
company also need proof of the buyer's homeowners insurance,
all the paperwork and money for the buyers' loan. It
sometimes seems as if there are hundreds of pieces of paper
and disclosures that need to be signed!
Finally, after all documents are
collected and signed by all parties and the money arrives
from the lender, escrow closes. Both buyers and
sellers get a final accounting of all money. Then the
sellers get the money, the buyers get the keys to their new
Who pays for what
buying or selling a home?
A. There are some customary
allocations of costs involved with a home purchase in
California For a detailed list of what buyers and sellers
What is a "Good Faith Estimate"?
A. This document, required by the
federal government for most loans, forces the lender to disclose
all costs for your loan upfront, including fees, closing costs,
points, appraisal, etc. It was developed to eliminate last
minute loan surprises. Be sure to demand it when you apply
for the loan. The actual lender -- not the broker -- must
give it to you within 3 days of your application. You
should also ask if your loan will adjust in the future and if
the figures the lender gives you includes the cost of home
insurance and any homeowners association fees.
Q. What's the difference
between a loft and a condo?
-- and I am talking decades ago -- lofts were simply large work
or storage spaces in industrial or commercial buildings.
In time, artists and others began to take over the large spaces
for work and then began to live there, too. Lofts these
days are usually big, open living spaces in former commercial
buildings. (In some places, however, so-called "lofts" are
being built from scratch -- rather than being conversions of old
buildings.) Many lofts are much smaller than they used to
be -- but high ceilings are a common characteristic of lofts.
A condo is usually an apartment style
living space that has been finished on the interior by the
builder. All the rooms, interior walls, flooring, closets,
and cupboards are in place and painted. As a condo owner,
you own the air space and interior walls within the rooms.
The building's exterior walls, hallway and common areas are
owned by the association of homeowners.
Q. What is a soft loft?
In some newer lofts, the builders add a wall to separate the
bedroom area from the rest of the open space in the loft.
These are called soft lofts.
Q. My lender tells me my FICO
score is too low to buy the home I want even though I have good
job. What is a FICO score?
FICO is an abbreviation for the Fair, Isaac Company which
developed a mathematical model to predict credit risk of
consumers. Using the FICO formula, credit bureaus come up
with a number that is assigned to you based on your credit
Basically, it works this way: every time you are
late with a payment, your FICO score goes down. When you
pay your bills on time, your FICO score goes up. And the
goal should always be to have as high a FICO score as you can
because the higher your score the lower your interest rate and
These days even with a high FICO score ,
you may not be able to get a loan unless you are willing to pay
20% to 40% down on the property. Banks have really
tightened up lending standards.