Working on Your First Home: Buying a Home or Building One
By: Tilden Moschetti
For a lot or home purchase, any negotiation must be pursuant to federal housing and state law. A home buyer looking into a property for sale or a vacant lot to build a new home on must work with several real estate professionals. The home buying process is more than simply making payments (down and monthly mortgage payments) for the agreed-upon purchase price (plus interest rate).
Owning and buying a house, or a lot to build on is not a simple process. Having to borrow money that must be repaid in countless monthly payments (or making mortgage payments each month) are not the only things that you are obligated to do. You have to make real property tax payments, pay your mortgage insurance premium, and be familiar with various terminologies used by a real estate professional.
Negotiations between home buyers and sellers begin with real estate agents and brokers. But this is just the beginning.
A first-time home buyer or seller, a licensed real estate agent, or a realtor can send properties from the multiple listing service. So much work, however, still needs to be done before closing, documents checking, and actual real estate settlement statement. Real estate brokerage is just the beginning.
A real estate transaction involving lenders is never easy, but if the buyer needs a home loan with monthly payment terms, this cannot be avoided. An aspiring homeowner must work on borrower requirements to get a mortgage loan.
Upon fulfilling obligations with the closing agent and title insurance company, one can proceed with the closing process. Escrowed funds that were deposited are released and may be used for closing costs.
Many buyers are unaware of the need for escrow funds, but real estate transactions generally require the services of an escrow company or escrow agent.
A home mortgage company will often require the escrow process to protect all parties that negotiate (in this case, borrowers and the mortgage lender). Escrow accounts involve a neutral third party. The earnest money deposit to be placed in escrow are held by a third party to reduce risks associated when you buy a house or a lot. An experienced Calabasas real estate attorney can explain how this works.
The money (the total amount of the escrow deposit could vary) is held in escrow until conditions are met by both parties involved. This gives an added protection to both the home buyer and seller. Also related to this are contingencies, including the home inspection conducted by a qualified home inspector, appraisal and appraiser fees, and closings.
If you want to build on your vacant real estate investment, you have to be familiar with how contracting and subcontracting works.
First-time homeowners are often daunted by the building process, especially because there are so many options that a home builder can choose from.
Some opt to build the entire house by themselves, while some prefer to subcontract various trade specialists while managing the whole process. Some choose to get the services of a construction consultant company, while others contract with a trusted builder who will be building the whole house.
The number of factors will determine which option will work best. Building a house on one’s means is often a good choice for those with lots of spare time and have good physical strength. On the other hand, subcontracting is often ideal for those with management skills and a good grasp of the trades involved.
Meanwhile, getting the services of a construction consultant company is best for those who wish to save money but lacks the confidence to do it by themselves. Reliable consultants can help you with the entire building process and contract with a builder to do the job for a lot less money. Hiring a builder can be the most expensive option, but those who can afford prefer it since it is arguably the least stressful way to build a dream home.
Reliable Calabasas real estate attorneys can help both the homebuyer and the one selling real estate.
A trusted Calabasas real estate attorney can help homebuyers, and those buying vacant lots to build on, in many ways. He or she can explain funds in escrow and good faith estimate, check down payment and interest rate on the sales price, and help you walk through escrow instructions and mortgage company paperwork.
At Moschetti Law Group, our practice serves the needs of Founders by providing real estate law and real estate syndication attorney services to Founders. Whether you are the Founder of a real estate empire or building a business and need assistance with purchase and sales, real estate transactions, or real estate litigation, we serve Los Angeles County, eastern Ventura County, and North Orange County from our office in Calabasas. We also have a primary focus on helping Real Estate Syndication Founders throughout the United States with forming their syndication, understanding crowdfunding, private placement memorandums, and operating agreements.