The Escrow Process
What, if anything, is a seller required to do to their home before you move in?
We’ve written previously about the escrow process, contingencies, and the California purchase agreement. As a buyer, you have the right to inspect the home (Within a certain amount of time) and make a request to the seller for repairs based on the results of the home inspection. Technically speaking, you can make repair requests based on your own findings, although hiring a certified home inspector or building contractor will provide you with a more thorough inspection, along with a detailed written report that will go to you, your agent, the seller, the seller’s agent and finally, the escrow officer.
That being said, does a seller HAVE to respond to your request for repairs? Or can they simply tell you “No.”
Section 9 of the California Residential Agreement and Joint Escrow Instructions (Also known as an RPA-CA) states:
Unless otherwise agreed: (i) the Property is sold (a) in its PRESENT physical (“as-is”) condition as of the date
of Acceptance and (b) subject to Buyer’s Investigation rights;
So according to the face value of the purchase agreement, the seller does not have to respond to your request for repairs. HOWEVER, this does not mean that every seller will refuse to accept your requests. Since we’ve discussed contingencies in the past, you know that, within an agreed upon time frame (or 17 days according to the default date set on the contract), you as a buyer have the right to cancel the contract and have your good faith deposit returned to you. So it is in a seller’s interest to at least consider your repair requests or risk what we call in the real estate industry a BOM (Back On Market) property. Continue reading
Something both buyers and sellers worry about, and how you can make sure it does close on time no matter what side of the transaction you’re on.
Escrow: That thing buyers and sellers endure as a part of the home purchase transaction. Or at least, that’s how many view the escrow process. Rather than consider it an “endurance,” both parties should view escrow as a way of making sure all aspects of the sale are in place prior to title changing hands.
Why does escrow exist anyway? Why can’t the home just “change hands” without all the waiting around?
Would’t it be easy if you can just make your offer, have it accepted by the seller, give him (or her) your money and then you get the keys? So why isn’t a property transaction as easy as an Ebay sale, or buying a car?
Unlike personal property, real property can be a bit more complicated. As a value asset that may have exchanged hands several times (In some parts of the country, homes can be over 100 years old), both buyer and seller have to be made aware of any issues affecting the property’s sale. This may include problems, defects, title issues, or even easement and boundary disputes. As a buyer, wouldn’t you want to know about these issues BEFORE you get the keys? As a seller, wouldn’t you want to make sure that the sale transaction goes smoothly, and that some issue affecting the property won’t come back to haunt you months (Or even years) after you’ve closed the sale?
Escrow insures that all conditions of the sale are met by both buyer and seller as an objective party to the transaction. A professional escrow company understands the rules and laws as laid out by the Bureau of Real Estate, as well as local laws, amendments, and supplemental guidelines involving a real estate transaction. Continue reading
When buying a home, you want to make sure that the property you’re owning is clear of any past issues.
You bought your dream home from a nice couple. The transaction went very smoothly, and you are now the proud owner of a home where you plan to live the rest of your life.
A few years later, someone knocks on the door, claiming to be the rightful owner of the home you now live in. His claim is based on the fact that his father is the deceased first husband of the previous owner, and it turns out that the “couple” you bought the house from were not actually married, but had been cohabitating together for several years after her first husband died. It also turns out, she was never added to the title of the property, and the deceased husband’s will gave ownership of all his land holdings to his only son. Of course, none of this came to light before or during the purchase of what you thought was your home. Continue reading
Property owners who “overlook” issues that can affect the sale of their home can have big problems down the road.
A leaky roof. That dryrot just below ground level on one of the posts that holds up your back patio. That un-permitted room addition off of the
These are but a few examples of issues that may affect the sale of your home. Whether they were caused during the time you have owned the home or not, if you are aware of their existence, you must disclose them during the escrow process.
Why disclosure is so important.
It is a requirement that sellers disclose all KNOWN issues that may affect the sale of their property. These issues may affect not only the value of the property, but also its safety and security. That being said, the buyer has the opportunity to hire a professional home inspector during the escrow process to assess any other issues, known or unknown. They also have the right to request any repairs that may arise as a result of the inspection. The seller may accept the request, refuse the request, or come to an agreement with the buyer as to which repairs may be initiated before close of escrow. The buyer also has the right to cancel the transaction prior to the contingency expiration period should an agreement not be reached. Continue reading
Home buyers have a right to inspect the property they are purchasing, but what are the seller’s obligations regarding the inspection process?
As part of a real estate purchase agreement supplied by the California Association of Realtors (Known as an RPA-CA), there are several contingencies that must be fulfilled in order to close escrow. These contingencies include such items as loan approval, home appraisal, delivery of addendums, pest inpection, etc. These contingencies have a default fulfillment date that must be adhered to (or amended by agreement from both buyer and seller), and in some cases, they may be waived under certain conditions.
One of the most important contingencies that may be fulfilled by the buyer is the home inspection. The buyer has a right to perform a thorough, non-invasive inspection of the property they are purchasing in order to determine any defects or issues that may affect the sale of the home. “Non invasive” basically means that no dismantling or destruction of the property may take place as part of the inspection. The buyer also has the right to hire a professional home inspector, which is usually highly recommended. Continue reading