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What You Need To Know About Buying a Home: Part Four

Curbed University delivers insider tips and non-boring advice on how to buy, sell, or rent a home or apartment. Additional questions welcomed to our inbox.

You're almost there. You can see light at the end of a very expensive tunnel.

Escrow

In San Francisco, escrow companies handle the nitty-gritty of paperwork, title insurance and the distribution of funds as agreed in the sales contract, plus recording the deed of sale. You write the checks.

Be prepared before you make an offer

It's simple. Have your mortgage pre-approved, have the deposit/down payment in the bank along with enough money for closing costs, title insurance, moving costs, and some funds (or a credit card) allocated for those small but critical items that come up. Like replacing light fixtures that seller did not include, or those blackout shades you didn't realize you'd need. And figure out how much time and you'll need to get the place up and running and ready to move into.

What's all this going to cost beyond the offer amount? According to Bankrate.com the average in about $4500 on a $200,000 mortgage:

Mortgage-associated and origination fees: be certain of what your bank or mortgage company is charging you and get it in writing.

Escrow and closing fees

Title insurance: one of the most important items on any list, title insurance will protect you against claims by previously-unknown heirs or spouses plus outright fraud, unpaid condo fees or missing rental tenants' deposits. Amongst other things. It costs as much as a new sofa.

Here's some other important stuff you should look into:

Movers: get a few estimates, preferably from movers referred by friends. The more you pack yourself, the cheaper if will be, but this may not be the place to cheap out. This is your life they're moving, and you want it done well.

Making the place your own: be realistic about what the house needs. Paint? New closet systems? Floor refinishing. If possible, have it done before you move in. By "possible" we mean setting aside enough to carry both places for at least a month but without telling the painters that.

Transfer fee: the responsibility of the seller, but the amount may become part of the negotiations. In San Francisco, it's $5 per $1000 of the purchase price and goes up from there- up to $7.50 per $1000 for a million dollars and above.

Square footage

Not worth the pixels or ink it's printed in, square footage is a much-touted metric for pricing but is fundamentally meaningless. Simply because no one measures the same way. Buy a house you like and that you think it fairly priced, and one you can live in for a while. That said, don't hesitate to bring a 25' tape measure along and take some measurements yourself before you make an offer.

Comparables

Another meaningless concept used to buoy a realtor's sales pitch. No two houses are alike or in the same condition. It may be interesting, but don't base your offer on it. What's more important is finding out what your house sold for the last time.

You've decided to make an offer. (The staff at Curbed SF would like to take a moment to congratulate you on your journey thus far.) Here's what it will be in it, simple version:

- Address of the property and type of deed (or stock transfer)
- Sale price
- Terms: the amount of cash (earnest money) plus any mortgage amount
- Date for closing escrow
- Agreement on buyer's inspection plus pre-close walk-through
Amount of earnest money deposit accompanying the offer, and how it's to be returned to you if the offer is rejected, plus penalties for breaking an accepted agreement
- Agreement to pay or pro-rate real estate taxes, maintenance or HOA fees, rents and tenant deposits, utilities
- Acceptance of Disclosure Report
- A time limit (preferably short) after which the offer will expire
- Exclusions (Grannie's chandelier)
- Contingencies

Pre-close walk though

Schedule a walk-though of the property a day or two before escrow closes but after the seller (or stagers) has moved out. It's your last chance to postpone or amend the sale, and probably your greatest opportunity for buyer's remorse. Be strong!

Get the keys! And get the locks changed.

Escrow has closed. Make sure your insurance has no gaps in coverage and that basic utilities are transferred. Confirm the deed has been recorded. Get the keys from your agent and have a locksmith poised to change the locks. It's yours now. Give yourself a pat on the back.
· What You Need To Know About Buying a Home: Part Three [Curbed]
· What You Need To Know About Buying a Home: Part Two [Curbed]
· What You Need To Know About Buying a Home: Part One [Curbed]