MHRECO’s Buyer’s Guide
1. Obtain Financing
If you need a mortgage, you should get pre-approved prior to submitting an offer. We can help introduce you to highly skilled and experienced mortgage lenders, and we’ll help you figure out who’s offering the best rates and terms.
Mortgage lenders will ask you to submit an application, along with copies of your recent tax returns, bank statements, pay stubs, and debt invoices. Once the lender receives this information, they’ll contact you to clarify questions, run your credit, verify your employment and, if you’re a renter, they may call your landlord to verify your tenancy and payment history. If all goes well, you’ll be pre-approved!
Documents
Uniform Residential Loan Application - the standard application that lenders ask you to fill out.
Pre-approval letters - examples of good to not-so-good letters provided by a North Bay realty office.
“What Are the Steps in the Mortgage Application Process?” - for more information, I like the way First Republic breaks down the whole process.
2. Create Your Wish List
Location location location! Identify the best neighborhoods for you and your family, then create your property wish list. We’ll help you track down the best available options. If everything you want isn’t something you can get, we’ll be your shoulder to lean on and help you get the most out of what you can afford!
Documents
HUD’s Wish List - HUD has a basic, straightforward template to get the wheels turning.
Pinterest’s Board of House Hunting Checklists - lots of interesting posts!
3. Review Listing Disclosures
When you’ve identified a property that you’re interested in, we’ll help you obtain the listing disclosures right away so that you can start reviewing them to decide whether or not to make an offer as soon as possible.
To be clear, disclosures are a big deal. Beyond price and your own due diligence, listing disclosures are the most important element in any real estate transaction. And they typically amount to hundreds of pages. We’ll help you review everything in detail to try to identify major issues and red flags.
In general, the most important disclosures are everything that have to do with 1) historic repairs and improvements; 2) the current condition of the property; and 3) any necessary future repairs and improvements. Past, present and future — if any one of these categories is lacking full disclosure, a good agent will identify the missing pieces and track them down.
In practice, the most important disclosures are property inspections (general property, roof, pest, etc.) performed by independent contractors (i.e. not the listing agent’s best buddy), the Transfer Disclosure Statement, the Seller property questionnaire, the Agent Visual Inspection Disclosure, and any property statements.
I’ve outlined below the most important disclosures you’d expect to encounter in buying a standard single-family home in San Francisco and Livermore/Tri-Valley.
Documents - San Francisco
SF Energy and Water Conservation Ordinance Recorded Certificates
General Information (SF Disclosures and Disclaimers Advisory)
Water-conserving Plumbing Fixtures and Carbon Monoxide Detector Notice
Property Inspection Reports
Applicable to Condos
Miscellaneous Disclosures (not linked)
MLS Public Information Prepared by Listing Broker/Agent
Evidence of Insurance
Building/Floor Plan Sketch
Detailed List of Historic Repairs, Improvements, and Additions
Documents - Livermore/Tri-Valley
Agent Visual Inspection Disclosure
Water-conserving Plumbing Fixtures and Carbon Monoxide Detector Notice
Property Inspection Reports
Miscellaneous Disclosures (not linked)
MLS Public Information Prepared by Listing Broker/Agent
Evidence of Insurance
Building/Floor Plan Sketch
Square Footage and Lot Size
Detailed List of Historic Repairs, Improvements, and Additions
4. Make an Offer
When you’re ready to make an offer, we’ll assist you with determining the best price and terms to offer. We’ll also make sure that you have all your financial documents in order and help you draft an introduction letter.
Documents
REALTORS use this Purchase Agreement to submit offers in San Francisco.
REALTORS use this Purchase Agreement in Livermore/Tri-Valley (and most of California).
Sample introduction letters from a Housingwire.com article:
5. Escrow
When you offer is accepted, the transaction enters into escrow. Outlined below are the major milestones you can expect in escrow, which usually lasts 21-45 days (assuming you’re working with a lender):
Initial deposit: You’ll submit your good faith deposit, typically via bank wire, within a few days after offer acceptance.
Inspections: Depending on the dynamics of your particular transaction, we’ll help you coordinate inspections. Based on findings, we’ll negotiate as hard as we can for seller credits and concessions for any recommended repairs that were not initially identified (or disclosed) in the listing/seller disclosures.
Appraisal: Scheduling the appraisal happens right away (a rush request may be required for an additional fee). The appraiser typically requires a few days to draft their report, then your lender will take another few days to review the report and finalize underwriting. Here is a sample appraisal report.
6. Closing
When your lender is ready to fund, the escrow company will coordinate signing with you, which can happen at their office or a convenient location for you with a mobile notary. We’ll obtain all closing documents as early as possible for you to review prior to closing day.
On closing day, you’ll sign documents and transfer the rest of the down payment. After the Sellers have signed documents and the County office has recorded the sale, we’ll notify you that the deal has officially closed!