Checklist for Buyers of Real Estate
Making an Offer
- Obtain your credit reports from all three credit reporting agencies and check them for errors. Shop around for a good mortgage rate and reputable lender and get pre-approved before making an offer on a home. Determine how much you can afford to pay and start looking at homes until you find something you are interested in.
- Have your agent determine the true value of the home before making an offer. Research legal aspects of the property - zoning, easements, liens and other restrictions. Make an offer on the property and include an earnest money deposit.
- Review the seller's property disclosure report with your agent. Determine what inspections you will want to schedule. Attend all inspections of the property, if possible. Review all written inspection reports with your agent. Remove contingencies according to the timelines in the contract.
- Fill out a loan application and submit your financial paperwork and get a pre-approval letter. Complete your mortgage loan process. Your lender will require an appraisal on the home. You or your agent should attend the appraisal.
- Once the offer is agreed to by all parties concerned, the agent will take the written final agreement and the deposit check and deposit them "in escrow." Escrow will then be deemed open.
- Before title to the property can be transferred to the new buyer, the buyer must deposit into escrow all monies necessary to pay for the home. Then, the seller must be paid, the seller's old mortgage paid off, and any other liens on the property must be paid off.
- Your title insurance officer can answer many of the frequently asked questions about title insurance, preliminary reports, and alternative ways of holding title to property in California.
- Is your homeowners insurance policy paid and ready to go into effect the day you close? One of the requirements that will be made by your lender is proof of a valid homeowners insurance policy, secured before closing.
- You should receive from your lender a "good faith estimate" of the fees charged for closing. Are the lender's closing costs as they represented they would be? Is the loan amount, interest rate, term of the loan, and prepayment penalty correctly stated? Are the prorated dates and amounts correct?
- Read over the Preliminary Title Report with your agent. 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. Are there exceptions to the title insurance showing encumbrances, easements and liens against the property?
- Call up all utilities: water, garbage, gas and electric, telephone, cable, etc. and make sure that everything is transferred over to you as of the close of escrow date.
- You should have a copy of the settlement statement before the date of closing so you know the amount of certified funds you will need at closing and how the funds will be dispersed. Deposit the rest of your down payment and closing costs with the escrow company. Sign-off on all papers at the title company.
- Ask for keys, garage door opener, and any security access codes. Is it clear on which day you will take possession of the property? You'll have a final walk-through of the property to ensure it is in the same condition and any required repairs have been performed.