How To Buy Homes For Sale In California
The following information will take you step by step on how to buy California homes for sale but will start with a little background and history about California itself.
The nickname given to California "The Golden State", describes it very well, not only factually but also figuratively. California, once known for its abundance of gold, is now well recognized for its "golden" entertainment industry, tourism, agricultural, as well as computer and information technology industries. If California were to become an independent country, it would be included into the ten largest economies in the world and would have 35th place among the most populous countries of the world. Considering the above facts, it is no wonder that California attracts many people from all over the United States, as well as the world, who relocate to California, invest in CA homes for sale, and buy vacation homes for sale in California. It is a well-known fact that homes in California have one of the highest values in the U.S. and for many years have been considered a very good investment opportunity.
Let's suppose that you have examined all pros and cons of buying one of the many homes for sale in California and decided to relocate. What are the things that you need to know about California real estate laws, home buying procedures, real estate agencies, California Realtors®, etc.? In this article, we will briefly go through major points that everyone who is planning to buy a home in California should keep in mind.
First of all, especially if you are coming from the East Coast of the United States, be prepared to accept the fact that lawyers are not used to consummate home sales in California. Instead, Californians use escrow services. This, in turn, leads us to the next difference - you might never meet the seller (buyer) of the property and in ninety-nine percent of cases, there is no such thing as a final closing meeting. Now let's look a little bit closer at some of the stages in the process of buying a home in California.
To start looking for your California dream home, you should first find a professional California real estate agent who will help you in your endeavor. As in most states, in California, anyone who offers his/her services in buying, selling or leasing a property must be licensed. The State Of California gives two types of licenses - salespeople and brokers. One thing you have to keep in mind is that only brokers are allowed to receive compensation for real estate services, which means that any salesperson you are dealing with must work for a broker. So when choosing a realtor® , first check his license validity and then make sure he works for a licensed real estate broker. Do not forget to check his or her professional credentials as well. You certainly don't want to deal with an unprofessional real estate agent who will drive you all over town without even asking what exactly you are looking for.
That being said, make sure your agent asks you the right questions before he/she starts offering to show you California homes for sale. Some questions that most professional agents ask are those that assess the level of your commitment to buy a house in the nearest future when the right opportunity comes your way. For example, the realtor® will try to find out as many details as possible about the California home you are looking for and a professional agent will also make sure you begin the loan approval process as soon as possible. If, during your first few conversations or interviews, your agent asks you questions that touched on most of the above points, then there is a good chance you are dealing with a professional realtor® you can rely on.
So you have now chosen your agent who helped you find the California house of your dreams and you're ready to move ahead and buy that house. The following stage is when your real estate agent is going to be even more useful. It is now time to make your initial offer. In California, a paper used to make an offer is called a Deposit Receipt. This form is used to enter, in writing, all details of this offer, including a description of the property in question. For details and an example, see the "Real Estate Deposit Receipt" on our California Real Estate documents page. In addition, you will have to determine an opening offer price for the house. Your real estate agent will help you with that as well. Also, please keep in mind that in California, along with your offer, you should provide a "good faith" deposit check of at least 3% of the offered price. Once the seller receives your initial offer, he/she might respond with a counter-offer, which usually says something like " We agree with the offer you have submitted to us, except the following..." and he/she will list all changes that the seller is requesting. As a buyer, you can respond with a counter-counter-offer and this process can go on until a mutually satisfying agreement is achieved or one of the parties is no longer interested.
As soon as both parties reach an agreement, the next stage of the process begins. Your California real estate agent will take the written final agreement along with the deposit check and deposit both into an "escrow" account. At this time escrow is now open. Escrow insures that both parties will enter into this transaction without bearing any risks. The Escrow holder is responsible for handling funds and documents pertaining to this transaction. In most cases, the escrow holder is a third neutral party represented by a title insurance company or an escrow company.
Your next step as a home buyer should be house inspection. In California, standard inspection fees range from $300-$500 and include a contractor inspection of the roof, foundation, soil, and swimming pool, as well as pest inspections. In cases when some defects are revealed by these inspections, the buyer might request from the seller to either fix the defects or provide funds for the buyer to take care of the problems.
After the inspection stage, you should obtain the Title Report and Title Insurance. In California, the Title Search for the property in question is conducted by a title company. When the buyer obtains a Title Insurance policy, he/she insures his/her interest to purchase the property along with the priority and validity of any loan. It is a contract to protect against losses due to defects in the title. For samples of these documents, please see our CA Real Estate documents page
Assuming that you have already been approved for the loan to purchase this house, you are now at the stage when you need to prepare and sign all necessary documents to obtain that loan before the closing day. The lender must send all documents to the escrow holder within one week of closing day. One or two days before the closing day, you, as a buyer, must send to the escrow holder the remainder of your down payment for the property.
When all the conditions of this deal are met by both sides, the "escrow" is closed and the deed must be recorded with a County Recorder. The escrow company must notify your real estate agent that the title has been recorded and that the house in question now belongs to the buyer. After the close of escrow, both parties will get a Settlement Statement, which will show all charges and credits for each party.
Our article has covered the most common steps in the process of purchasing a home in California. As you have seen in California, lawyers are usually not used to conclude the deal but we encourage you to seek advice of an attorney if you have any legal or tax questions. If you have any questions about this article, feel free to contact us . If you need help finding a reliable agent in California, please search our database of California Realtors®. You can also use our nationwide Real Estate MLS listings database to search for your dream house in California.