The Initial Agreement and Deposit – Tips to Keep in Mind:
Keep copies of everything – in writing!
For the sake of clarity (and frustration-avoidance!) it is always recommended to convert all verbal negotiations and/or agreements including counter-offers and addenda into written agreements to be signed by both parties. Silvia will assist you in drafting all of the paperwork for your purchase correctly, keep copies of all of these documents, and will ensure that you are promptly provided with copies of everything.
Deadlines are crucial!
Now that your offer has been drafted, you will be given a timeline to mark every stage in the process of negotiations, acceptance and ultimately, closing of the real estate transaction. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process you will be constantly updated, so you will always be prepared for the next step. No ruffled feathers around here.
The Closing/Escrow Agent.
In Oregon an agreed upon title company will function as the neutral closing agent. The designated title company will hold any deposits/earnest money in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use a property etc..
How to Hold Title.
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications – especially when selling or upon death of the title holder.
Once your offer is accepted by the Seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase – and ideally as early in this timeframe as possible to allow time for Seller response and potential negotiation. Remember to bring your checkbook to the home inspection to pay the inspector, unless they take credit cards. Inspections generally take anywhere from 2-4 hours depending on the size and condition of the property. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. Silvia can offer the names of several experienced, local inspectors if need be.
Depending on the outcome of these inspections, one of two things may happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
2. The Buyer (you!), after reviewing the property and the papers, requests repairs be completed or a renegotiation of the terms of contract (often the price) may occur.
Appraisal and Lending.
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. Appraisers are specialists in determining the value of properties based on a combination of factors. There are different methods of appraisal that can be used to determine the value of a home. Like CMA’s (Comparable Market Analyses) appraisals are subjective and it is unlikely that any two would be exactly the same. Values may also differ depending on the reason the appraisal is being conducted.
Continue through the mortgage approval process. When the lender asks for documents be sure to get them to them asap to avoid delays in closing.
Silvia will reach out to you with a reminder to call utility companies 1-2 weeks prior to close to arrange for utilities to be transfered into your name the day of closing. There is a list of local service providers and their contact info located under the ‘about’ tab on this website but Silvia will provide you with the numbers of the applicable providers.
Throughout your transaction Silvia will stay in constant communication with your lender to ensure everything is progressing smoothly and so that she can relay this to the listing agent/Seller.
If the property that you are purchasing is part of an HOA you will want to familiarise yourself with their rules, regulations and any existing/potential fees or assessments. We request copies of all important documents from the Seller as soon as you have an effective agreement to purchase so that you can commence your review. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all of the information completely and legibly so there is no delay in processing the application. Often the escrow officer handling the transaction will be able to assist you with the necessary steps to establish a connection with your new HOA.
If you are obtaining a loan, your lender will require you to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. Keep in mind that you may be able to save hundreds of dollars a year on homeowners insurance by shopping around. Arrange for homeowners insurance to start the day before closing.
A walk-through will typically be scheduled for the day prior to close to ensure that the property is in the same condition as it was (or better) as when you wrote your offer. This isn’t a mandatory but is always recommended.