|Are YOU a Redondo Beach First Time Home Buyer?|
One of the most common calls I get these days goes something like this: "Our landlord is raising our rent and we can't afford it anymore so we have to buy something." And, truthfully I feel for anyone who is paying far more in rent than it would cost them to own a similar property.
Now I'm not saying that there aren't good reasons to lease. We've all been renters at one time or another and there is a time and place for everything. But in general, paying $40,000 per year for multiple years to rent is just not a winning proposition for anyone except maybe the landlord.
FYI, some of the other reasons I find first time buyers jumping into the market are family formation, baby on the way, moving out from parents or room mates or recent relocation. All good reasons.
So, here's the first bit of advice I can offer: "There's just enough information on the internet to get you totally confused." This includes everything from listings that appear on the national portal sites and broker IDX sites to advise on forums. And as a ground rule best to take what your friends, co-workers, family members and others advise you with a grain (or two) of salt. Chances are when they bought their home that the market, lending guidelines, and process was different - even if it was just last year.
Here's the top five most common questions I get from buyers. Or, if not these some pretty close variation.
- Why are they selling?
- Will the seller take less?
- Can I lose my deposit?
- What if my loan isn't approved?
- When can I get the keys?
WHY ARE THEY SELLING?
What might be a better question to focus on is what terms are the sellers looking for, ie long or short escrow, leaseback after the close of escrow, seller contingency on finding a replacement property.
Often by pursuing those questions, I can get a better understanding of what's going on behind the scenes. But, truthfully, in most cases it doesn't really matter. If the seller has gone through the trouble of listing their home for sale in the MLS, they want to sell and that's all you really need to know (at least at the beginning).
WILL THE SELLER TAKE LESS?
Better questions to focus on are whether the Seller has multiple offers and when the offers are being reviewed. If it is a new listing and they already have offers in the first week to 10 days or so, it pretty much will sell above the asking price unless someone has some extraordinary terms they can offer (such as all cash and closing in 7 days with no contingencies).
If the listing has been on the market for a while, is not moving, has not had any price reductions, and activity is low, then yes the seller may very well accept an offer below the MLS list price.
As I also mentioned above, whether the property will sell for less or not is often also a function of who the decision maker is. In a short sale or REO, the loss mitigator or asset manager may only have authority up to a certain limit to discount the home. On the other hand, if the seller is someone who inherited a property owned free and clear they very well might accept less than the asking price if the property has been on the market for a while.
CAN I LOSE MY DEPOSIT?
In the standard CA purchase contract (CA-RPA), you can only lose your deposit if you remove ALL of your contingencies and then do not close escrow. And, the amount you can lose in most instances is limited to no more than 3% of the purchase price or the actual amount of your earnest Money Deposit (EMD). There are some variations to this specifically in some REO contracts, builder's contracts and Probate Sales. But sticking to the most common standard transactions, if you have removed all of your contingencies in writing and then do not perform, that EMD may be forfeited.
Now that I have your attention, let me add that it has never happened to any of my Buyer clients and if I am representing you, you won't be the first.
One of the most common ways Buyers lose their EMD is because their lenders can not perform. So, let me continue on that theme as I answer the next question.....
WHAT IF MY LOAN ISN'T APPROVED?
Unfortunately, there are some lenders that say they will fund your loan and then do not perform meaning the loan documents never show up and they start giving you excuses at the 11th hour when it is too late to get out of the deal. This most typically may happen when you are dealing with a "mortgage broker". That is someone who can not directly fund the loan but is only taking your file to someone who can fund your loan.
Under normal circumstances, if for some reason you can not get the loan and you have not removed contingencies you can cancel the contract. Many sellers or their agents may ask for the actual document from the lender showing you were in fcat turned down. But if you acted in good faith, you can get out of most contracts.
WHEN CAN I GET THE KEYS?
That measn the day that the Title Company records the deed at the County office. In LA County where I do almost all of my sales (Redondo Beach, Hermosa Beach, Torrance, Long Beach, Rancho Palos Verdes are all LA County), in most instances recording is the day after the loan funds.
What usually happens is that when the Escrow Company has "confirmation" from the Title Company they call or email the agents to notify them that the escrow has closed.
Equally important to when you get your keys is how you get your keys. Sometimes, the lsiting agent will leave them in the lockbox (if there is one) and other times they will be turned over directly. Its also important to make sure that in addition to the keys you also get any garage door openers (clickers), mailbox keys or if it is a condo or gated community, those keys as well. And please have your locks changed or re-keyed as soon as you can after your own the home.
Happy House Hunting!