The Buying Process
Escrow, Inspections, and Appraisal: During this stage of the home buying process, you will have the opportunity to learn a lot more about the property.
What is Escrow? In a nutshell, escrow begins when your earnest money deposit and purchase offer is accepted by the seller. Escrow ends when you become the official new owner, registered in the county records
Title Company and Escrow Holder: Lu can help you select a title company and escrow holder. Escrow acts as a neutral third party which holds all instruments necessary to the sale, including funds and the grant deed. The title company will research the complete recorded history of the property to insure that the title is free and clear of any encumbrances by the date of closing and that all new encumbrances are properly added to the title. You will receive a “preliminary title report” that will show current encumbrances and easements. For example, some properties are subject to CC&R’s (covenants, conditions, and restrictions) which may limit various activities from building to parking restrictions. There may be recorded easements and encroachments, where others have limited rights to use your property. Lu will always explain the title report to you in detail so you fully understand the information.
How to Hold Title: How will you own the property? By yourself, or with someone else? There are at least half a dozen ways to own your property, each with its own legal, estate, and tax implications, particularly with respect to selling or transferring, or disposition upon death. It is advisable to consult with an attorney or your tax advisor to be sure you select the best way to hold title.
Inspections: Once your offer is accepted by the Seller, Lu will recommend some professional inspectors to evaluate your home’s major systems during your contingency time. Lu will even set the appointment for you and be there during the actual inspection. Plan on attending all of your inspections with your agent and feel free to ask any questions that come to mind. Usually, you should always plan on having a home inspection that covers the whole house, but if there is a specific area of concern, such as the chimney or roof, then you should have a specialist in that field come to the home as well. Other inspectors to consider are in the following areas: roof, chimney/fireplace, property boundary survey, septic, pool/spa, foundation, arborist, mold, plumbing, and electrical.
Appraisal and Loan Process: Lu will keep in close communication with your lender, who will let you know when additional information and documents are needed to approve your loan application and fund your loan. The lender will often send an appraiser out to the property. Appraisers are specialists in evaluating properties, based on a combination of square footage, building costs, and recent sales of comparable properties. The aim is to make sure you are not paying too much for a property. When you are within two weeks of closing, Lu will double check with your lender to be sure that loan will go through smoothly and on time.