Over the last two weeks, I have been actively working with four sets of home-buyers who have each had some pretty intricate files. For example, a few weeks ago I had home inspections on a stellar mid-century home in the El Cerrito Hills, (photos coming soon.) During the inspection contingency period, we had half a dozen inspectors through the property at the same time. It was a revolving door coupled with a time crunch as we had to move quickly to investigate the condition in a short time period (By the time the inspectors were available, we only had a few days left in our inspection period). The roof inspector, the chimney inspector, structural engineer and seismic contractor were there at the same time, grabbing my client Susan or Greg to update them on their findings. A few days later and by the time my clients removed their inspection contingency, (the period of time agreed upon to fully investigate the property and neighborhood.) they felt completely comfortable with the property's condition. This is not to say they had a flawless property, but that they had a property whose flaws they understood. So what happens after you have a home inspection?: A few things. You can remove your inspection contingency, if you feel completely satisfied with the condition of the property and secure in moving forward with the purchase. You can remove it subject to a repairs or seller credits. You can cancel your contract if there are serious issues and you are uncertain about the value or condition of the property. With another client, we had a hiccup during the financing contingency period. However in the end, after hours of strategizing with my clients and their lender, we were able to successfully resolve the problem and close escrow on time.
When it comes to financing it is always the buyers choice on who to use for financing the property, be it a mortgage broker, credit union or bank. I strongly suggest working with someone with a proven track record of success who is local. In the situation above, I was able to contact this professional after hours in emergency situations to resolve issues and set a game plan. In this case, if the mortgage lender was out of the area or in a different time zone, this task would have been extremely difficult. Additionally, because of my on-going working relationship with this mortgage consultant, there was a huge incentive for her to resolve this file with a positive outcome. (She knows client satisfaction keeps her on my recommended service provider list.)
There are two finance contingencies: appraisal and loan. The appraisal contingency should always give a buyer ample time to have an appraiser in the house, write their report and submit it to the underwriting department at the financial institution that is funding the loan. For example, say you are offering $500,000 on a house and you are obtaining 20% down conventional financing. The house will need to appraise at $500,000 for the lending institution to agree to finance the property. If the house does not appraise at the price your offered, you can either: renegotiate the purchase price so the 20% down ratios work with the appraised value, cancel your contract, (as long as you have an appraisal contingency), or bring extra money to the loan to satisfy the difference in value. The loan contingency is the time period allotted to obtain a satisfactory appraisal, get loan approval from the financial institution that is funding your loan after further review of your finances and the house. When you get pre-approved for a loan before you write an offer, you are screened by the mortgage consultant or broker to see that you meet specific guidelines for a loan. Once you place an offer and it is accepted, then both the borrower and property is scrutinized before you have loan approval.
I am so happy that my clients were able to purchase the homes that they really wanted. I hope the above information gives you some clarity into the process. If you have more questions, I am happy to talk.
Every year the Mormon Temple has a stunning light show. On a clear day you can see a gorgeous Downtown Oakland and San Francisco Bay view as a back drop.
