In California, there are as many people with real estate licenses as there are people with law degrees. Just because you have a real estate license doesn’t make you a Realtor. Same for a law degree. It’s too easy to get a real estate license or a law degree. For a person to practice law, it’s the passing of the California State Bar that makes them a lawyer (and passing that California bar exam is hard since it is considered one of the most difficult tests in the entire country). Unfortunately, passing the test to get a California state real estate license doesn’t make one a Realtor since the test isn’t that hard.
People tend to complain about paying commissions to a Realtor but they don’t complain about paying fees to their doctor, lawyer, accountant, dentist, or any other professional. Just because someone has a “title” doesn’t make them worth the money they charge. One has to prove their worth to you. If they do so, then you’re willing to pay them what they ask. Same thing for paying a commission to a Realtor to sell your home. If you are on the buying end of the deal, you might think it isn’t important how good a Realtor you have, but believe me, it is important.
The average real estate transaction takes 30 to 45 days from acceptance of the contract to close of escrow. What has gone on prior to that could have taken an additional 30 days or much longer while the search for the right house takes place. That time is an intangible since the buyer and Realtor need to get to know each other and then find “the right house”. I’d like to talk about the steps that go on from the time we sit down to write an offer until you get the keys to your new house.
What is the Process for Buying a House?
1. The first and most important step in the process is that you must become Pre-Approved for a loan by a lender. Your loan officer will tell me what you can afford in a house and I begin the search for your future home.
2. We go out and look a properties that I have previewed for you.
3. You tell me “this is your 10”. This is the house you want to live in. This is the one!
4. I request the Disclosure Package from the listing agent. You then read through the Disclosures, sign everywhere I have highlighted for you to sign, and return it to me. Then we talk about all of your questions and concerns, if there are any, from reading the reports. I am required to do a visual inspection of the property as a part of the offer, and if there’s time before writing your offer, I do this and include it with the Disclosure Package. If we don’t have time for it before writing, I do it after the acceptance. You read and sign my inspection report form, as do the sellers and the listing agent.
5. We sit down to write the offer in a contract. This can take as little as an hour or as long as several hours depending on your questions, ease of doing business and concerns.
6. You write a check for 3% of the offer price, making the check out to a Title Company, either one the seller has specified if you live in Santa Clara County, or one you specify in San Mateo County. This is your “good faith” deposit and also equal to the Liquidated Damages clause in the contract.
6. I prepare a package to take to the listing agent, and hopefully am able to hand it to the sellers of the property, while I present your offer. In this package is the Agency Agreement that we have signed allowing me authority to represent you in this transaction; a photocopy of your check; a letter signed by your lender indicating you are pre-approved for the purchase price; the contract; and the signed disclosure package. All of this is presented to the listing agent and to the seller on your behalf.
7. If we come to agreement on the offer price, the seller’s sign the contract in acceptance and we have a ratified contract. If they wish to counter any of the terms, they write up a counter offer and I present it back to you. Or if all else fails, they can reject the offer and we begin again.
Let’s assume they accept our offer, what takes place next?
1. I call the Title company and open up an Escrow account in your name. I have 48 hours, per our local MLS, to have your deposit check turned over to the Title company to open up this account. They pick up the check and deposit it into the account for your escrow provide me with an account number and order the Preliminary Title Report.
2. I call your lender, fax over the signed contracts to him and they begin the official process of finding and locking in a loan.
3. I order any additional inspections you may wish to have on the property, should you be concerned about something related to the original inspection.
4. I get the name and contact information of your insurance broker for property insurance and forward on to the escrow account.
5. I go through all paperwork to make certain there are no missed signatures. If we miss any, and believe me, we always do, I have to get them from you, or the seller, or the listing agent. We have multiple pieces of paper for some documents. This used to require faxing back and forth but today we have all of this done virtually online. You are able to log into a special account and sign any missing papers electronically.
6. I begin a file for your purchase and in the file is every document you have seen and signed. I also have given the original of all of these pieces of paper to my office to hold and make certain we have no missing documents.
7. I make certain any questions you have are answered in a timely manner. I am in contact with the listing agent on a regular basis as well as your escrow officer.
8. As we near the close of escrow date – about 10 days out, I call your lender to see when to expect your lending documents for signature. The escrow officer will let me know as soon as they arrive to her and we schedule the day and time for you to come to the title company and sign all of the loan documents, the deed of trust and the like. This usually is about three to five days before close and takes about an hour of your time. I am present at your signing along with your lender to answer any last minutes questions you might have.
9. About two days prior to close, we do a final walk-through of your new home together. At this time we’re making certain the home is in the same condition it was when you made the offer, that everything is in working order, and if it’s vacant, you will be able to inspect all walls and floors that had be covered by furniture.
10. On the day of closing, I receive a call from the title company that you are on record and I call you. This generally takes place late morning. Then we make arrangements to meet so I can your present keys to your castle.
This was the general list of things that I do for a buyer if there haven’t been any problems along the way. Do you think I’ve earned my money? My job is to make certain you don’t buy a property that has issues, or than could place you into litigation. I rely on the great deal of training I have, the highly experience people in my office that might have encountered similar issues should one arise, and the lawyers on retainer by my broker, or the California Association of Realty, or who I know personally, if I have legal questions. I have taken hundreds of hours of additional education in order to be sure that I can represent you fairly and fully. I have earned the titles of Realtor, GRI (Graduate Realty Institute), and SRES (Seniors Real Estate Specialist) and RCS-D (Real Estate Collaborative Specialist – Divorce) in order to help you in all aspects of your real estate life.
These are the reasons why you need to have a good Realtor in your life. I take my profession seriously and do this full-time. Think about it. Don’t you want to have someone in your court as a full time advocate?