HOMEOWNERS AND HOMEBUYERS:
THE PRIVATE SALE
This site is devoted exclusively to the Private Sale, one conducted outside of the Multiple Listing Service. Homeowners focus primarily on disclosures, both statutory and contractual; on property specific disclosures as well as generic disclosures; and on resale ordinances, if applicable.
Pre-approved homebuyers focus primarily on their preparation of the Purchase Agreement and on their due diligence - ie, their inspections.
To help conceptualize the standard transaction I break it down into three phases. They do not run sequentially, but overlap. The sequence must be tailored to each transaction. Ideally the process begins with preparation of the disclosure package. Our fees page touches on common variations.
OFFER AND ACCEPTANCE
This phase begins with the opening of an escrow and reviews of the preliminary title report and of the homebuyer's preapproval status. Although the Purchase Agreement originates with the homebuyer, in a private sale it may be efficient for the parties to cooperate in drafting that contract, and accompanying addenda, such as a rent-back agreement. This avoids the aggravation of Counter Offers. The date on which the parties reach written agreement on price and terms is referred to as the Date of Acceptance - from which all time periods flow. The homebuyer then forwards the initial deposit to the title company directly - not to the anyone else.
DISCLOSURES AND INSPECTIONS
To wait until Date of Acceptance before assembling the disclosures package may invite confusion, surprise, delay. Approval of disclosures is a standard homebuyer contingency. If the disclosure package is available before/as the parties negotiate, then the time period for approval begins on Date of Acceptance. Disclosures should include two very important third party reports: the Preliminary Title Report and the Natural Hazards Disclosure Statement.
Homeowners must also comply with resale ordinances, if applicable. The most tedious is the sewer lateral inspection. As with the disclosure package, I recommend compliance before listing the home, to avoid confusion, surprise, delay after escrow has already been opened.
Within the time period agreed to in the purchase contract - customarily 7-10 days - homebuyers should have the home inspected. I recommend at least two inspections: one by a licensed contractor in the business of home inspections, and another by a structural pest control operator.
FINANCING TO CLOSING
Homebuyers should submit requested financial documents and verifications to their mortgage lender before embarking on their search. The pre-approval letter then accompanies their offer package. Approval of the appraisal and of the loan(s) are contingencies that must be removed by homebuyers within the time periods specified in the Purchase Agreement.
At this point in the transaction escrow officers become actively involved ordering payoff demands, preparing settlement statements, coordinating with the lender for delivery of the loan documents, arranging signing appointments for the parties, and recording the Deed and Deed of Trust. The day of recordation is Close of Escrow.
All information on this site is deemed accurate but should be independently verified. In addition, some information is date sensitive.
For specific questions and inquiries on a pending transaction contact the Lawyer Referral Service for the County in which the property is located.
400 Montgomery 505 San Francisco 94104 ~ 415.781.3000
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