When making a home purchase, any home buyer should make sure they have all that they need. Buying a home, however, can be complicated. Everything must be pursuant to federal housing and state law. It is not simply making payments (down and monthly mortgage payments) until you complete the agreed-upon purchase price (plus interest rate). There is so much more to it.
The home buying process involves several negotiations between home buyers and sellers, but a lot of other parties are involved. Owning and buying a house is not just about how much money you will borrow or how you will make mortgage payments each month. On top of monthly payments, you have to pay your mortgage insurance premium, make real property tax payments, and a lot of other fees that you are obligated to pay. A significant amount of money is involved.
When buying a new home, a lot of other real estate professionals are involved, which will be the focus of this article.
1) Real estate agents
If you are a first-time homebuyer or seller, you will likely contact your real estate agent or Realtor so he or she can send you potential properties for your planned homebuying. They help kick-start the process, although you still have a long way to go before closing documents checking and real estate settlement statements.
If you need a home loan, you first need to get a mortgage. A real estate transaction involving lenders often takes time, but if the buyer starts preparing for the closing process, the new home is in sight. After you fulfill obligations with the closing agent and title insurance company, you may use the escrow fund to settle estate closing costs. This is why escrowed funds, which are vital for real estate transactions, must be taken seriously.
2) Escrow agent or escrow company
An aspiring homeowner will likely need to get a mortgage loan, with set monthly payment terms. Now the home mortgage company will often require the escrow process for a home loan. This is meant to protect all parties that negotiate (including you, the home buyer), because escrow accounts involve a third person or neutral third party. The total amount of the escrow deposit could vary.
It is not uncommon that the borrower will not know why a mortgage lender requires an earnest money deposit to be placed in escrow. They are held by a third party to reduce risks that come before you buy a house (and when transacting the home sale). Generally, money is held in escrow until conditions are met by both parties. Escrow funds help ensure that both home buyers and sellers get an added level of security and peace of mind.
3) Home inspector
While some people have experiences with a home inspector who glossed over major problems or one who specifically looks for defects that they would offer to fix for a fee, a careful home inspection before purchase is crucial for your real estate investment. The industry is not strictly regulated, but the professional assessment of a trained and insured inspector can help with your questions on residential construction techniques and systems.
As long as there is no conflict of interest (avoid home inspectors who are also part-time contractors) and as long as a written guarantee will be provided (to back up his inspection findings), you should be fine. For added peace of mind, it would also help if you look for one with a yearly certification from a reputable training institute, and with insurance coverage (which should include general liability, errors and omissions insurance, and worker’s compensation).
4) Credible Calabasas real estate attorney
Generally, an earnest money deposit is made by a would-be homebuyer (deposited into an escrow account) to show to the selling real estate that he or she is serious. However, borrowers must also be protected.
A trusted Calabasas real estate attorney can help homebuyers avoid scams, look into down payment or principal and interest, and walk through escrow instructions. He or she can help explain what funds in escrow, good faith estimate, mortgage company paperwork, and homeowners insurance policy mean. The idea is for you to be able to cancel should it be necessary, given extreme situations that require cancellation.
For clarifications on the above or for questions on mortgage escrow payment, appraisal and appraiser fees, contingencies and closings, or real estate taxes and insurance payments, call our Calabasas real estate attorney at Moschetti Law Group.