Entire Process From Due Diligence to Continuing Disclosure Subsequent to Closing
Contingencies
Contingencies As part of your offer, Dick will include in the offer to purchase document certain contingencies to your purchase of this property, such as your having a property inspection, reviewing of disclosure documents from the seller, and reviewing of disclosure documents from the HOA or Homeowner Association (Strata documents), and a preliminary title search to ensure the seller has a right to sell, and to define any unpaid liens on the property. You will normally be given seventeen days to conduct your due diligence, during which time the Escrow Officer will assist in obtaining the preliminary title report. Dick will assist you in this due diligence process as required by explaining each document's content and purpose. Seller
Disclosures
The seller will disclose what he knows about the property at the time of signing the contract. The simple straight forward obligation is for the seller to disclose everything known in the way of defects or risks to the buyer. If the seller knows about it, it must be disclosed on the appropriate disclosure document.
Property Inspections
1. One of the first steps to take is to arrange for a physical inspection of the property by a professional licensed Home Inspector. Dick will provide you with a list of inspectors from which to choose. The purpose of this inspection is to find out all that you can about the physical condition of the property. If possible, you will want to attend this inspection so that the Inspector can show you what he finds. Once the inspection is complete, you will be provided with a thorough written report. The Inspector will list and describe any defects he finds, and provide photographs to illustrate the findings. If you cannot be present, the report will be emailed to you. Your cost of this inspection will be in the range of $200 to $500.
2. Occasionally, the Inspector will recommend that you to call a specialist in a given category, such as roofing, heating/cooling, or pool, for further inspection.
3. In some cities such as Palm Springs and Cathedral City, a separate inspection will be scheduled with the local fire department to make sure that smoke detectors and carbon monoxide detectors are present and working properly.
4. Another inspection report required is the Termite Report, often called a Wood Destroying Pest Inspection Report. If any evidence of termite activity is found, the termite company will treat the property at that time. The Pest Report will also indicate any type of wood destroying organisms that may be present, as well as any dry rot, which generally is a result of excessive moisture. Your purchase contract will specify who is responsible for scheduling the inspection and paying for it, along with any repairs. Typically the seller will pay for this service. It is customary that they do so, but not mandatory.
Armed with the inspection results and other seller disclosure documents, you can then decide what, if any, repairs/replacements or allowances you would like to request from the seller. The seller may agree to correct any specific issues you request, or they may offer you an allowance or may negotiate with you over certain items. When an agreement is reached in resolution of the issues, you proceed with the process. If an agreement cannot be reached, you could choose to cancel the offer and have your earnest money deposit returned. Note that sellers of REO properties seldom will pay for inspections or repairs, although this varies with each seller. HOA (Strata) Documents If you are purchasing a property in a planned unit development (PUD), you will receive a copy of the Home Owner's Association documents (HOA or Strata docs.) Make sure that you are familiar with all obligations, rules and costs associated with the PUD before you remove this contingency. Should you find the rules, regulations and restrictions of the association unacceptable, you could cancel the purchase contract.
Release of Contingencies
Once you are satisfied within the results of the due diligence process (usually required to be accomplished in 17 calendar days), and you are fully informed as to the condition of the property, you can proceed with your purchase by signing the Release of Contingencies form. At this point in the process, you are committed to the purchase and may put your earnest money deposit at risk if, at a later date, you do not complete your purchase.
Transfer of Funds
One day before the closing, the funds must be received into Escrow in US dollars. The money may be sent by wire transfer (or bank certified check) to the Escrow Officer. If a certified check is used, an extra day or two must be planned to allow time for the check to be processed and the required funds deposited in the escrow account in time to close. Personal checks are not acceptable. Your Escrow Officer will help coordinate the transfer of funds.
Closing of Escrow
The Escrow Officer will finish the process by recording the deed with the state at the local registrar's office. The entire purchase process from offer acceptance to closing typically takes 30 days to complete. You do not have to be present at the time Escrow closes. You will want to change over the utilities to your name by closing. We will provide you with a list of contact information, so that you can accomplish this by phone. Homeowner's Insurance – one more thing Before the close of Escrow, you will want to make sure that you have purchased Homeowners Insurance for your new property, and that the policy will be in effect by your date of closing. We will help you find an agent experienced in insuring Canadians and second homes. Get the Keys! Once your deed is recorded, the transaction is complete. You will receive from Escrow a set of the escrow documents. Dick will arrange to transfer the keys to you for your new desert home!
Purchase Transaction Costs
Although negotiable, the average transaction cost of buying the property will be the price of the property, plus approximately an additional 2% of the price to cover escrow and purchase transaction expenses. Additional costs include the home inspection, which will average around $200 to $500, depending on the size of the property. These costs are estimates. If a lender is involved in your purchase transaction, additional lender fees will be included – the total lending cost will be identified by your lender, specific to your loan. Additional estimated expenses include prorated property taxes to complete the tax year, and HOA fees if applicable, usually paid monthly. Dick can provide you an estimate of your closing costs. Then just prior to when your funds are required to be sent to Escrow for closing, Escrow will also provide you with a final estimate. Dick provides all his services to you the buyer at no cost. Dick will receive a commission for his services from the seller as a part of his selling expenses.
<< Previous | Next >>
Source: https://www.dicksakowicz.com/the-due-diligence-period-inspections-and-closing
0 Response to "Entire Process From Due Diligence to Continuing Disclosure Subsequent to Closing"
Post a Comment