What to Expect in a Residential Transaction

There are several stages involved in buying a home.  We have summarized a list of the most common steps taken during a residential transaction below.  Individual situations vary, so it is a good idea to contact your real estate professional for more information.

Finding a Realtor

The most common first step in buying a home is selecting a real estate agent.  They will help you to determine your different needs and wants, as well as help you to determine your financial eligibility.

Getting Pre-Approved

A lender can't tell you how much you can afford.  They can only tell you the maximum amount you qualify for, according to their specific criteria.  You may not want to spend as much as you qualify for.  Therefore, your objective is to determine with your loan officer the monthly payment that is comfortable for you.

It is a good idea to get pre-approved to determine your price range.  This can save much time and frustration later in the home buying process.

Finding your Home

Select a property that is affordable and fits your needs.  Discuss your offer and review your contract with your real estate agent.  The agent will then present your offer to the seller.  Then they will negotiate your offer.

You will prepare an "earnest money" deposit (typically, 1 to 3% of purchase price).  The seller ideally accepts your offer (the seller can, of course, accept, counter, or reject your offer).

Opening Escrow

Deposit your "earnest money" into escrow.  Escrow will then order a Preliminary Report.  The next step is to submit your loan application.

During the contingency period, have a qualified inspector conduct a physical inspection of the property.  Next, approve the seller's Transfer Disclosure Statement.  Approve the Preliminary Report and conduct a property appraisal.  At this point you must obtain loan approval from a lender.  It is also important to perform termite inspection and certification.

Select insurance company and coverage insurance will be in effect at close of escrow.

Once all this is completed you will sign the documents.  The Title Company then receives the signed documents.  You must obtain a cashier's check or money transfer prior to closing date to secure your down payment.

Finally, close the Escrow.  Deposit your down payment and closing costs to escrow.  The lender sends the balance of the purchase price to the Title Company.  The deed is then recorded with the County Recorder's office.