You’ve found the home you want to make your own. You have your pre-approval from a lender, you are comfortable with the mortgage payments and now you are ready to put pen — or digital ink — to paper.
The first questions for you and your Realtor to consider are what price to offer, how long does your lender need to get your loan approved and funded (i.e., how long of a contingency period and escrow) and how you would deliver your deposit to escrow in the event your offer is accepted.
Your deposit, generally 3 percent of the purchase price in our area, is due to escrow within the first three days after acceptance. You can have it wired in from your bank or bring in a check to your escrow office. This money will be deposited, so you’ll need for that money to be available quickly after your offer is accepted. It’s a little awkward if your earnest money deposit check bounces.
Another expense in the home-buying process that is often overlooked is the cost of inspections. You’ll want to budget $1,000 to $2,000 for inspections depending on the size and/or complexity of the home you are purchasing. Condos usually need only a $500 budget.
Some people ask why the sellers don’t pay for inspections on the products they are selling. On occasion they do, but in general, you want the inspectors working for you and the sellers need to protect themselves from liability if their inspectors miss something important to you. You’ll want to hire a general inspector to review the major systems and see what other inspections might be necessary.
A roof inspection is always a good idea, even if it was recently replaced. It’s difficult for a generalist to determine if a roof was installed correctly.
Also, general inspectors do not have X-ray vision for items such as plumbing lines. In Santa Barbara, many sewer lines are reaching the end of their life. It’s prudent to get a sewer line scope so you know the condition of your line and whether you need to put money aside for a replacement.
At times, you’ll need to call in a geologist to determine the soil stability and review the house’s drainage condition to ensure a long and healthy life at that site.
I know this sounds like a lot of inspections, but you need to know what you are buying so there are no surprises. Contact your Santa Barbara Realtor to guide you.
— Laurel Abbott is a real estate agent with Prudential California Realty and president of the Santa Barbara Association of Realtors. Contact her at laurel@laurelabbott.com or 805.879.8050. The opinions expressed are her own.