“I’m buying a house!” you tell your friends with excitement.
**cue downpour of unsolicited advice, scary stats & information**
If there’s one thing I’ve learned through my years in real estate it’s this, misinformation is everywhere.
I’d like to settle some of the basics and put a few of those rumors to rest.
Here are 10 Things You Might Not Know About Buying A House (and it’s all true, I promise).
1. The buyer (you) can walk for any reason
During the contingency period, usually 10-17 days, you can cancel for any reason and get your deposit back. It’s that simple.
Contingency Period: an offer on a home has been made and the seller has accepted it, but the finalized sale is contingent upon certain criteria that have to be met. These criteria, or contingencies, typically fall under three major categories: appraisal, home inspection and mortgage approval.
2. The seller has no contingencies
Unlike buyer’s rights (see #1), the seller cannot cancel the sale. Even if a better offer comes around, the seller is bound to the sale as soon as the offer is officially accepted.
NOTE: The seller can gain rights to cancel if the buyer isn’t performing according to contract (i.e. neglecting to remove contingencies on agreed upon date.)
3. The buyer dictates the inspection process
Once escrow is open, the buyer has the chance to perform any and all inspections they want during the contingency period – and the seller must make the home available for inspectors.
Escrow: a neutral third party that facilitates the transaction and holds all money/documents throughout the transaction
4. The seller is not required to complete the buyer’s list for repairs
In both L.A. and Ventura County, only three things are required by the seller:
- Install smoke detectors,
- strap the water heater,
- and install carbon monoxide detectors.
Everything else is negotiable.
5. Termites are common
The cold, hard truth: Homes in California either have termites, had termites, or will eventually have termites.
6. Everything must be disclosed
A seller is required to disclose ANYTHING AND EVERYTHING that may have a material effect on the value of the property and their agents must do the same.
7. You can still cancel after removing contingencies… but your deposit is at risk
Buyer and seller pre-agree that the 3% deposit of the purchase price is the cap for damages if the buyer cancels after removing contingencies. So, if you change your mind, you can do it for a cost.
8. A sale is NOT contingent on the final walkthrough
The final walkthrough is meant to give buyers the chance to make sure the home is in the same condition it was at the time the offer was made, and to ensure the negotiated repairs (#4) were made.
9. Escrow is a 3rd party company
And represents neither buyer nor seller in the transaction. It facilitates the transaction according to the purchase contract and amendments.
10. The seller pays the commission.
It’s true, the buyer doesn’t pay the agent that represents him/her.
I’d love to help you find and buy your next home.
