Mid Century Modern Homes

A.  This is the process for buying a home:

1. Check your credit report 3 to 6 months before you plan to buy a home.  Clear up any problems and errors so your credit score will be the best it can be.

2. Call your agent to outline your requirements for your new home.  Before you call, write a list of what neighborhoods you prefer, how many bedrooms, how many bathrooms,  if you need a family room, etc.  

3. If you have not already spoken with a lender, you should do so immediately.  You need to know how much your new home can cost -- your lender can tell you.  When you apply for a home loan, ask for a document called a "Good Faith Estimate".  This is a government-mandated estimate of your actual loan costs.  This should prevent any last minute surprises when your loan closes.

4. Start your home search.  Your agent can provide you with detailed e-mails of all the listings that match your requirements in your chosen areas.    Then you can then go out and look at any or all the homes you wish to see.

5. Find a home you like!  And decide to make an offer on it.

6.  Write your offer on the home and negotiate the terms and conditions of the purchase agreement contract.   

7. The seller agrees to accept your offer!

8. Your agent will open escrow at an Escrow Company and deposit your earnest money check.  

9. The Escrow Company handles much of the paperwork involved in completing the sale.  It also keeps all money until the date that both seller and buyer sign the final paperwork to finish the deal.  Toward the end of the escrow period, you give the down payment to the escrow company and your lender submits the loan amount.  After all the terms and conditions are satisfied, and paperwork signed, the escrow company pays the seller.

10. The Grant Deed and other documents are recorded with the County Recorder -- making the sale official.

11.  Congratulations!  You get the keys and the home is yours!!

Q. What is escrow and why does it take so long?

A. When a purchase contract has been agreed to by both buyer and seller, that contract along with the earnest money are given to the escrow company, an impartial third party that can only take action based on instructions from both buyer and seller.

After escrow is open, the escrow officer begins to assemble all documents required to complete the terms of the contract.  For example, the officer gets current property tax records to determine how much property tax each party will pay.  The escrow company also need proof of the buyer's homeowners insurance, all the paperwork and money for the buyers' loan.  It sometimes seems as if there are hundreds of pieces of paper and disclosures that need to be signed!  

Finally, after all documents are collected and signed by all parties and the money arrives from the lender, escrow closes.  Both buyers and sellers get a final accounting of all money.  Then the sellers get the money, the buyers get the keys to their new home!

Q. What is a "Good Faith Estimate"?

A. This document, required by the federal government for most loans, forces the lender to disclose all costs for your loan upfront, including fees, closing costs, points, appraisal, etc.  It was developed to eliminate last minute loan surprises.  Be sure to demand it when you apply for the loan.  The actual lender -- not the broker -- must give it to you within 3 days of your application.  You should also ask if your loan will adjust in the future and if the figures the lender gives you includes the cost of home insurance and any homeowners association fees.

Q. What's the difference between a loft and a condo?

A.  Originally -- and I am talking decades ago -- lofts were simply large work or storage spaces in industrial or commercial buildings.  In time, artists and others began to take over the large spaces for work and then began to live there, too.  Lofts these days are usually big, open living spaces in former commercial buildings.  (In some places, however, so-called "lofts" are being built from scratch -- rather than being conversions of old buildings.)  Many lofts are much smaller than they used to be -- but high ceilings are a common characteristic of lofts. 

If you are an original owner of a loft, you will have to finish the interior yourself.  Local government regulations require a bathroom and a  kitchen in all living spaces before the space can be certified for occupancy so that part will be done -- at least in a minimal way.  Lofts are also now available by resale and the prior owner will have divided up the space,  installed floors, put closets and cabinets in place, etc.   
Ownership of a loft is usually similar to a condo: the owner owns the air space and interior walls in her/his unit and the common areas of the building are owned by the homeowners association.

A condo is usually an apartment style living space that has been finished on the interior by the builder.  All the rooms, interior walls, flooring, closets, and cupboards are in place and painted.  As a condo owner, you own the air space and interior walls within the rooms.  The building's exterior walls, hallway and common areas are owned by the association of homeowners.  

Q. What is a soft loft?

A.  In some newer lofts, the builders add a wall to separate the bedroom area from the rest of the open space in the loft.  These are called soft lofts.

Q.  I bought a new car while I was house-hunting.  Now my lender tells me my FICO score is too low to buy the home I want.  What is a FICO score?  And what does my new car have to do with buying a house?

A.  Well, FICO is an abbreviation for the Fair, Isaac Company which developed a mathematical model to predict credit risk of consumers.  Using the FICO formula, credit bureaus come up with a number that is assigned to you based on your credit history.  Basically, it works this way: every time you apply for new credit or are late with a payment, your FICO score goes down.  When you pay your bills on time, your FICO score goes up.  And the goal should always be to have as high a FICO score as you can because the higher your score the lower your interest rate and fees.  So buying a car put a big ding on your credit score which now, apparently, falls below your lenders' limits.   Any other big purchase would have the same effect.  If you keep making all your payments on time, your FICO score should go up again.