Why You Should Have a Home Inspection When Purchasing a Home in Torrance

Why You Should Have a Home Inspection – Torrance Real Estate

Whether you’re buying an older home or new construction in the South Bay, a home inspection is an absolute necessity. A home inspection will assess the building code conformity as well as all the systems and structural components that make up the building, such as:

  • Structural elements, foundation, framing etc
  • Plumbing systems
  • Electrical systems
  • Heating and Cooling systems
  • Roofing
  • Cosmetic condition, paint, siding, etc.
  • General Environmental Issues.

When you’ve decided upon the South Bay home you want to buy and you’re about to sign the Offer To Purchase real estate contract, make sure there is an inspection contingency in that contract allowing you to get your own professional Home Inspection. “Pre-Selling” or “Pre-Listing” inspections are not common, however, in some cases, a savvy seller may have had their own structural inspection done which they usually will provide to a prospective home buyer. If they are wise, they will have arranged to have any discovered problems corrected.

However, I still insist that my buyer clients have his or her own independent inspection done. Normally, upon acceptance of the Offer To Purchase, you will have 17 days to have the inspection completed, analyze the report and respond to the seller. We will be your eyes and ears at the structural inspection should it not be possible for you to be present yourself.

In the event that hidden problems are revealed through the structural inspection process, you may do one of two things:

  1. If the inspection reveals conditions that change your desire to buy the home, you may terminate the purchase agreement by notifying the seller in writing and provide a copy of the inspection report disclosing the problems.
  2. You may submit a list of the problems discovered in the inspection report, known as a request for repair, to the seller and request that the seller make the necessary corrections and repairs before the deal is closed, or adjust the price accordingly.

The Inspection Report

When you interview a home inspector, ask him what type of report format he provides. There are several types of reports used by inspectors, such as computer generated reports, the checklist format and the narrative style report. Some reports are completed and generated on site and some may take up to a week to complete. There are good and bad points to all of these formats.

Make sure that the inspector will take pictures that explain their descriptions and potential problems.

Hire an inspector that gives detailed descriptions of the home and potential problems instead of vauge and easily missinterpreted descriptions.

“Bathroom Shower Enclosure: Condition – Minor wear, heavy wear, damaged, rust stains, or chips in enamel finish. Recommend sealing drain and pan at base of tile.”

As you can see, this narrative description includes a recommendation for repair. Narrative reports without recommendations for repairing deficient items may be difficult to interpret, should your knowledge of construction be limited.

Make sure, if you do not understand something, that you ask questions. Items in the inspection report that are not serious quite often can be interpreted by a nonprofessional to be a major factor. A good home inspector should be able to put things into perspective and answer all your questions. If for some reason a question cannot be answered at the time of the inspection, the inspector should research the question and obtain the answer for you.

Take the time to become familiar with your home inspection report. If the report has a legend, key, symbols or icons, read and understand them thoroughly. The more information provided to you about the property, the easier it will be to understand the overall condition. If possible, try to be present when the inspector is doing the inspection. You do not have to be there during the entire process, but if you can walk through with the inspector at the end so he can show you the findings of the structural inspection, you will learn a great deal about the home you are about to purchase.

Who Pays for What During Escrow in Torrance?

By Keith Kyle21345_Hawthorne_Blvd_#415_bed1 copy

Closing Costs – Who Generally Pays What In a Torrance CA Escrow

Keep in mind that the charts below are based on the standard allocation of costs in Torrance.  As with any detail of buying a home everything is negotiable including who pays what costs during the transaction.  In addition not all of these costs exist in every transaction and many are dependent on the lender, escrow company and the details of the offer.

Title Fees

Cost

Customarily Charged By/To:
Description
Owners Title Policy Title:To Seller Fee for the title policy. Calculated using the sales price.May be reduced if home was purchased or refinanced inthe last 5 years. Insures that the title is as agreedto at closing
LendersTitle Policy Title:To Buyer Title policy issued to lender to cover the amount of the loan.Based on the loan amount unless it is a negative amortizationloan.
Sub Escrow Fee Title:to Buyer & Seller Fee to administer the payoff of loans or property taxes of the seller and collection of funds from the new lender
Document Transfer Tax County: to Seller at $1.10 per thousand of sales priceCity:  No transfer tax in Torrance Fee charged on all properties that transfer title – based on sales price.
Record Release/Reconveyance County:To Seller Charge to record the release/reconveyance
Federal Express/Messanger Fees Federal Express: to Buyer & Seller Charge to deliver all time sensitive documents and monies
Title/Wire Fee Banking Instituion: to Buyer & Seller Charge to wire funds to escrow, seller, lenders, etc
Electronic Recording County: to Buyer Charge to electronically record the document
Record Grant Deed County: To Buyer Charge to record the grant deed
Record Trust Deed County: To Buyer Charge to record the trust deed.
Messenger Messenger Service: To Buyer and Seller Charge to special messenger documents during the escrow: Fee
varies with distance
Lender’s Endorsement Title: to Buyer Charge for endorsements required by lender to cover “outside
the normal” risk circumstances

Escrow Fees

Cost
Customarily Charged By/To:
Description
Escrow Fee Escrow: Each pays own Covers liability assumed as well as standard processing costs.
Demand Fee Escrow: to Seller Charge to request a statement & process involved in getting a payoff figure
to escrow on the outstanding amount of the current loan. One demand fee per loan.
Process HOA Docs & Transfer Fee Escrow: Seller Fee for processing required to assign membership for HOA a& copying all governing documents
Document Fee Escrow: to Buyer Covers the cost of all processing required to meet new lender requirements
Loan Tie-In Fee Escrow: to Buyer Covers the cost of all processing required to meet new lender requirements
Federal Express Federal Express: to Buyer For document packages to out of County Lenders.

Lender Fees

Cost
Customarily
Charged By/ To
Description
Origination Fee Lender: to Buyer Charge for lending money at 1% of the loan amount
Documentation Preparation Lender: to Buyer Paid to lender for preparation of final loan documents
Tax service Tax Service: to Buyer Fee charged to buyer to set up property taxes with the state
Wire Banking institution Charge for the wiring of funds to title for closing
Underwriting Lender: to Buyer Fee to direct lender for the process of approving
Tax impounds Lender: to Buyer Collected to create an impound reserved account for the lender to pay property taxes twice a year
Prepaid Insurance Lender:to Buyer Generally 1yr of hazard insurance collected for impound reserve
account
Appraisal Appraiser:to Buyer Paid directly to appraiser for appraisal of property
Credit Report Lender: to Buyer Paid to credit bureau for report containing 3 credit scores
Processing Lender: to Buyer Paid to mortgage broker for processing loan package from application to closing

Disbursements

Cost
Customarily Charged By/ To
Description
HOA Transfer Fee HOA Management: to Buyer To transfer ownership and handle new accounting set up
HOA Dues HOA Management: to Seller Paid through month of closing
Fire Insurance Insurance Agency: to Buyer 1 year prepaid premium for Homeowners insurance
Notary Notary: to Buyer

Payoffs

Cost
Customarily Charged By/ To
Description
Recording Fee Existing Lender: to Borrower Charge for having reconveyance recorded.
Statement forwarding fee Existing Lender: to Borrower Charge for issuing a payoff statement

Credits and Prorations

Cost
Customarily Charged By/ To
Description
HOA Dues Seller: to Buyer Calculated from date of COA through month-end
County Property Taxes Seller: to Buyer Calculated from the date of payoff through end of period paid for.

Who Pays for What in Escrow

Closing Costs – Who Generally Pays What In a Torrance CA Escrow

Title Fees

Cost
Customarily
Charged By/To:
Description

Owners
Title Policy

Title:
To Seller
Fee for the title policy. Calculated using the sales price.
May be reduced if home was purchased or refinanced in
the last 5 years. Insures that the title is as agreed
to at closing

Lenders
Title Policy

Title:
To Buyer
Title  policy issued to lender to cover the amount of the loan. Based on the loan amount unless it is a negative amortization loan.

Sub
Escrow Fee

Title:
to Buyer & Seller
Fee  to administer the payoff of loans or property taxes
of the seller and collection of funds from the new lender

Document
Transfer Tax

County,
City: to Seller
Fee  charged on all properties that transfer title – based
on sales price.

Record
Release/Reconveyance

County:
To Seller
Charge  to record the release/reconveyance

Federal
Express

Federal
Express: to Buyer & Seller
Charge  to deliver all time sensitive documents and monies

Title/Wire
Fee

Banking
Instituion: to Seller
Charge  to wire funds to escrow, seller, lenders, etc

Electronic
Recording

County:
to Buyer
Charge  to electronically record the document

Record
Grant Deed

County:
To Buyer
Charge to record the grant deed

Record
Trust Deed

County:
To Buyer
Charge
to record the trust deed.

Messenger

Messenger
Service: To Buyer and Seller
Charge to special messenger documents during the escrow: Fee  varies with distance

Lender’s
Endorsement

Title:
to Buyer
Charge  for endorsements required by lender to cover “outside the normal” risk circumstances

Escrow Fees

Cost
Customarily
Charged By/To:
Description

Escrow
Fee

Escrow:
to Buyer & Seller
Covers  liability assumed as well as standard processing costs.

Damand
Fee

Escrow:
to Seller
Charge  to request a statement & process involved in getting
a payoff figure to escrow on the outstanding amount of the current loan.  One demand fee per loan.

Process
HOA Docs & Transfer Fee

Escrow:
to Buyer & Seller
Fee  for processing required to assign membership for HOA
a& copying all governing documents

Document
Fee

Escrow:
to Buyer
Covers  the cost of all processing required to meet new lender
requireents

Loan
Tie-In Fee

Escrow:
to Buyer
Covers  the cost of all processing required to meet new lender
requirements

Federal
Express

Federal
Express: to Buyer
For  document packages to out of County Lenders.

Lender Fees

Cost

Customarily
Charged By/ To
Description

Origination
Fee

Lender:
to Buyer
Charge  for lending money at 1% of the loan amount

Documentation
Preparation

Lender:
to Buyer
Paid  to lender for preparation of final loan documents

Tax
service

Tax
Service: to Buyer
Fee  charged to buyer to set up property taxes with the state

Wire

Banking
institution
Charge  for the wiring of funds to title for closing

Underwriting

Lender:
to Buyer
Fee  to direct lender for the process of approving

Tax
impounds

Lender:
to Buyer
Collected  to create an impound reserved account for the lender to pay property taxes twice a year

Insurance
impounds

Lender:
to Buyer
1yr  + 2 months hazard insurance collected for impound reserve  account

Appraisal

Appraiser:
to Buyer
Paid  directly to appraiser for appraisal of property

Credit
Report

Lender:
to Buyer
Paid  to credit bureau for report containing 3 credit scores

Processing

Lender:
to Buyer
Paid  to mortgage broker for processing loan package from
application to closing

Disbursements

Cost
Customarily
Charged By/ To
Description

HOA  Transfer Fee

HOA Management: to Seller To  transfer ownership and handle new accounting set up

HOA  Dues

HOA Management: to Seller Paid  through month o closing

Fire  Insurance

Insurance Agency: to Buyer 1  year prepaid premium for Homeowners insurance

Notary

Notary:  to Buyer Charge  to seller for signing of grant deed or certificatin

Payoffs

Cost
Customarily
Charged By/ To
Description

Recording  Fee

Existing  Lender: to Borrower Charge  for having reconveyance recorded.

Statement forwarding fee

Existing  Lender: to Borrower Charge  for issuing a payoff statement

Credits
and Prorations

Cost
Customarily
Charged By/ To
Description

HOA  Dues

Seller: to Buyer Calculated  from date of COA through month-end

County  Property Taxes

Seller:  to Buyer Calculated  from the date of payoff through end of period paid for.