I am new to real estate investing and am trying to do some research just for my own knowledge and was hoping someone can help me out.
In California, when you make an all cash offer on a SFH, how does the close process work? If it is a 15 day close, when do the inspections, walkthrough, paperwork signing and cash wiring happen?
If someone can provide some insight, it'd be greatly appreciated.
Typical, but Cali may differ a bit.
Inspection period of 5-7days typical.
Order title work when delivering executed contract to title co., with EM.
Wire money to title co the day before closing
Final walk through day before/of closing.
Sign closing docs at closing, or before if out of town.
The house I sold in San Jose three years ago was for all cash as-is. The buyer wanted a 10-day escrow, which became 12 days because of a weekend.
I provided the building inspection report (which was a condition the buyer had to agree to accept). There were paperwork signings at the escrow company office, a walkthrough by the buyer's agent a few days before closing, and wiring of the buyer's money to the escrow company on the day of the closing. Since the sale was as-is, no termite tenting was done.
My realtor worked with the escrow officer to provide me with the deadlines I had to meet. I had to remove my belongings and vacate the property by my deadline as my part of the deal (I had to be gone by the close of escrow). I was advised not to communicate with the buyer or the buyer's agent. All communication had to go through my agent.
Once the deed was recorded with the county, I no longer had responsibility for the property. The escrow company wired my money from the sale into my bank account (the details of which I had set up in advance with the escrow officer). I then called my insurance company to have the homeowner and earthquake policies cancelled. The buyer's agent picked up the keys to the house from my agent.
She's out of the state of CA but perhaps @Shari Peterson came chime it..
Thanks, @Mark Pedroza , I will. I suppose it depends on what the exit is. First of all, I assume you are talking about a short-term flip, A to B and B to C (A=Seller, B=Buyer, C=End Buyer).
If you have a C Buyer with cash or a no-seasoning loan, then it would go like this:
Day 1: C Buyer wires funds into escrow for B-C
Day 1: B Buyer wires into escrow for A-B
Day 2: A-B records
Day 3: B-C records
Day 3 or 4: Disbursements happen on Day 3 or 4, depending on when we get recording confirmation for C
The B Buyer can use their own cash or use Transactional Funding to close.
If your C Buyer requires seasoning, this means that he (or more likely, his lender) won't close until you're showing as the owner of record for an X period of time. The time between the A-B and the B-C depends on how much time the C Buyer requires. The turnaround can happen in as soon as 4 days, as shown in the above example. The difference between that scenario above and this one is that the C Buyer won't wire their funds into escrow UNTIL they see that B is the owner of record. This is costlier funding for the B Buyer, but it can be considered Transactional Funding.
Thanks everyone. This has been extremely helpful!