You just got your offer accepted on your favorite house in North Park. Now you have a certain amount of time to remove all of your contingencies. The California Real Estate purchase agreement notes up to 21 days to remove all contingencies. However, in today’s competitive market, if your buyer’s agent does not shorten the contingency dates when writing an offer, you will most likely get beat out by your competition. Contingency periods are tied to timelines and dates. The buyer is expected to have completed all investigations within the time indicated in the purchase agreement and signed off on that contingency. Below is a list of all contingencies when buying a house in San Diego.
You will have your timeframe agreed upon in the agreement to do your general inspection as well as any other specific inspection, such as electrical, plumbing, foundation, roofing, etc. This does not mean that you wait until the end of that time period to do these inspections. What it means is that by the end of when your timeframe comes, you should already have completed these inspections. Your Realtor should have put together what is known as your “request for repair” if you are going to be submitting one prior to this date and inspection contingencies should be removed by this time.
Request for Repair-
Once all of your inspections have been completed, your Realtor will sit down with you and go over the inspections in detail. A good Realtor will know how to structure a “Request for Repair” based on what comes up in the inspection. Knowing that a request for repair is simply that, “a request”. The seller does not have to do anything that you have requested. However, if you are reasonable with your request, a reasonable seller will consider fixing or renegotiating based on the items requested. On the other hand, if you submit a laundry list of items that were on the home inspection, know that you will most likely turn the seller off and they will either say “No” to everything or decide that they prefer to move on to a buyer that is more reasonable. We have seen this happen many times.
The appraisal will typically take place within the first 7-10 days of having an accepted offer. You will know pretty soon if the home appraises at the purchase price or not. Appraisals are performed by a 3rd party who will walk through the home, take pictures and come up with their valuation report. They then send it to the bank that is lending you the money to buy your home. A title company, typically hired by the seller will do a title search to make sure that there aren’t any clouds or liens attached to the home. This report is sent to the lender who wants to make sure that there aren’t any issues with the home. Appraisal contingencies typically get removed at the same time as loan contingencies, although it can be removed sooner.
Prior to going out and searching for homes for sale with your Realtor, you should already have been pre-approved with a lender. This means that you should have filled out an application, given them your last 2 years of tax returns, current pay stubs, bank statements they should know what your credit score is. This way, you are way ahead of the game once your offer gets accepted and you get into escrow and are not late with removing all of your contingencies when you are supposed to. If you are working with an experienced local lender, they should be able to have full loan approval within 12-17 days. Remember, you will most likely only have 17 days to remove all of your contingencies and the loan is the last one to remove. The appraisal will typically take place within the first 7-10 days so you will know pretty soon if the home appraises at the purchase price.
The sellers have several disclosures that they must fill out and give to the buyer during the Escrow period. These documents will provide information on previous improvements, renovations or upgrades completed, as well as whether work was done with or without permits.
Buyers should cross-check the seller’s disclosures with the city building permit and zoning reports. Work completed without a permit, or approval by the municipality, may not have been performed to code, which could result in a fire or health hazard. This is not always the case but should be investigated properly.
Disclosures are supposed to be provided to the buyer within the first 7-10 days. However, in San Diego, you will want to have this within the first 0-3 days.
Your Realtor most likely suggested you write a 10 day inspection contingency period in order to compete with other offers so you must move quickly.
Having these disclosures prior to you doing your home inspection is very helpful and informative. The home inspector looks at certain areas of the home pertaining to what he or she finds on the disclosures. Listing agents will sometimes have them upfront and will upload them into the MLS, which is very helpful. This way, your buyer’s agent can download them and go over them with you prior to submitting your offer.
Staying on track with your contingency periods is crucial, especially in a busy seller’s market. You would not want to receive a notice to perform from the seller for not sticking to the contract. If so, the seller can technically cancel the agreement if you are not able to perform the specific contingencies agreed upon in the purchase agreement.
Close of escrow is typically 30-45 days in San Diego, although many times we close in less than 21 days.
If you are thinking about buying a home in the North Park, South Park or any metro neighborhoods in San Diego, contact the McT Real Estate Group. We are located in North Park and would love to help you with finding your dream home for the best price.