Escrow Process Archives – Torrance real estate and homes for sale

State of Torrance Real Estate Market As We Head into 2020

March 3, 2020 by Keith Kyle

Welcome to our Torrance real estate update for the coming year. 2020 is looking to be another banner year for home sellers as the combination of seemingly endless demand and historically low interest rates means more people will be looking to purchase a home.

View the current homes for sale in Torrance California.

In general the real estate market seems to be slowing down heading into 2020 but for a very odd reason…..each month there are fewer homes hitting the market. Fewer listings mean fewer home sales. January saw a very slight uptick in the number of listings so we’re hopeful that is a trend that continues. Other than that small bump in January, the number of homes for sale has dropped every month since May of 2019

According to Torrance realtor Keith Kyle, “It’s clear that the market is cooling off as there has been an increase in new listings coupled with fewer sales and homes going into escrow since summer.” The chart above shows that the number of active listings has held pretty steady between 150 and 170 since summer, but the number of sold homes as well as new escrows has continued to decrease. If this trend continues the market will shift more in favor of buyers and less in favor of sellers. It’s clearly been a sellers market over the past few years.

The chart below shows the upward trend over the past few months with avarage “months of inventory” of unsold homes on the rise.

What Exactly Is Debt To Income Ratio

February 3, 2020 by Keith Kyle

One of the key items that a lender takes into consideration when you’re getting pre approved for a loan and during the underwriting process is your debt to income ratio. This tells the lender how much money you owe each month compared with your monthly income to come up with a ratio to determine how much of a risk you are to them. This ratio comes from adding up all of your debts including mortgages, auto laons, student loans, credit card balances and any other debt you pay off each month to your pre-tax income each month. Lenders have different thresholds that they’ll allow so it’s always good to talk with several lenders. If you’re not comfortable getting the process started we would be happy to give you several lenders that we’ve worked with and that have earned our trust.

How Buyers and Sellers Handle Home Inspection Challenges

November 9, 2019 by Keith Kyle

One of the more treacherous parts of an escrow is the home inspection and request for repairs. Often times the buyer thinks that the home inspection is a “checklist” of what needs to be fixed while the seller either thinks their home is perfect or “it was just fine for us so why does the buyer need things that work fine upgraded or repaired”. Finding middle ground isn’t always easy.

As the graphic below shows, 80% of home inspection reports show at least something needing to be fixed. We always recommend to both our buyers and sellers to be reasonable. On the buyer side stick to actual problems or repairs. If it’s an issue that the buyer will have to immediately pay for to have repaired…it’s a reasonable request. The biggest challenge items are either those called out as not up to current code, or items towards the end of their service life. Buyers need to understand that the statement “not up to current building code” does not mean it’s necessarily problematic. Codes change all of the time and unless it’s a clear safety issue, it’s usually best to stick with actual repairs. Items at the end of their service life really depend on the item, the cost and how extensive the rest of the repair list. We’ve found that asking for everything usually ends with the seller dismissing any repairs….even the reasonable ones.

Keith Kyle is a top producing realtor and Torrance real estate specialist with Vista Sotheby’s International Realty in the South Bay. Contact Keith for more information on how the home inspection and escrow process works in Torrance real estate.

Why You Should Have a Home Inspection When Purchasing a Home

November 20, 2017 by Keith Kyle

Why You Should Have a Home Inspection – Torrance Real Estate

Whether you’re buying an older home or new construction in the Torrance or 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:

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.
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?

June 22, 2014 by Keith Kyle

By Keith Kyle

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

December 31, 2013 by Keith Kyle