Steps To Buying A House!  Part 2

The story of the Starks learning the steps to buying a house continues...

Steps To Buying A House:  THE OFFER and ACCEPTANCE

We made an offer that evening.


Before we made an offer I made sure we went over terms and timelines of our offer.  Some of the items we went over were…

  1. How many days for us to do our inspections
  2. How many days before we can release our inspection and appraisal contingencies (more on contingencies later)
  3. How many days to close the transaction
  4. Will we give the seller time after closing to move out (Rent Back)? - if the seller needs it.

Our offer was strong and based on facts, market trends and some additional info we received from the listing agent.  

When our offer gets accepted, we can celebrate a little bit, but it's best to get inspections and appraisal ordered right away!

Photo by Shawn Arron

Our offer was accepted the next day and the Starks were ecstatic…  and nervous at the same time.  "My goodness!" Catelyn said.  "We're buying a home!  This is getting real."

“So, what’s next?”  they asked.

Here is what I told them...


You have to send in your EMD (Earnest Money Deposit or “Good Faith” Deposit) to the title company.  (Refer back to Part 1 here regarding EMD and here’s a more detailed article here on EMD and how you can use it to your advantage.)

The title company - simply put - is a third party.  They don’t take sides.  Among the many things that they do, it boils down to them handling all of the paperwork so at closing, they will…

  • Take your money and disburse it to the seller and all third parties
  • Record the title of the property under your name so you become the legal owner of the home (technically you don’t own the home until you pay off your mortgage)

One of the most important thing that they do is get a Statement of Personal Information from you.

Sample of Statement of Information form courtesy of Fidelity National Title

Imagine and think back on the steps taken when buying a house... - we looked at homes - we made an offer -  our offer gets accepted - now we’re in the middle of a transaction.  You’ve spent time looking and now you've spent hard earned money on inspections and you've spent time going through all of the disclosures...  The point is... You.  Have.  Spent.  Your.  Time.  On.  This.

Then ...

 ... We hear from the title company that they have found “something” under your name that may prevent us from closing the transaction like…

  1. A large, personal judgement under your name that you thought you already paid for, but didn’t know you only paid part of it… and the amount is too large for you to pay off.
  2. A criminal record or flag on your passport
  3. Legal names don’t match
  4. And many other things


Imagine how you'd feel after hearing that... That would be frustrating, wouldn't it?  You've potentially wasted your time and money when it all could have been avoided.

We don't want that do we?  Of course not, so...

The bottom line is make sure you give the title company your information because ... YOU NEED TO KNOW THESE THINGS ASAP!

"Agreed?"  I asked.  They both wholeheartedly agreed.

Then, I continued... Next, we need to do our...


In the steps to buying a home, doing our due diligence is of the utmost importance.  It means we do our inspections on the home so we’ll know the condition of the property and we can ask for the items that may be of concern to you to be repaired by the seller.

It’s best to order the inspections as soon as possible. 

Know the condition of the home before closing - Order a Home Inspection.

Photo by Mark Moz

We also to go over all disclosures, including the seller’s disclosures.

The seller disclosures is what the seller knows about the property IN writing.  So, we need to over it well and make sure you ask me any questions you may have.  I will be going over it as well to see if there are any potential red flags, which I will then discuss it with you.

Bottom line is YOU NEED TO HAVE INSPECTIONS DONE and ALSO GO OVER ALL OF THE DISCLOSURES- PERIOD.  After all, this why it's called the Due Diligence period.


Home Inspections run anywhere from $350 to $500, depending on the size of home and if it has a crawl space or not.  The termite report should run you around $95 to $125.

You can choose the inspection company or I can suggest them to you.  I only suggest those companies that I have worked with and know their level of competence.

Then we need to order the inspections asap.  Ordering it early means getting the reports early.  The sooner we know if there are any repairs that we need to ask the seller, the better.  It sets the tone for the rest of the transaction.


The appraisal, sometimes takes a lot longer to get back than we like.  It’s very important to know the value of the home ASAP and to know if the property (the collateral) is worth the amount of money your lender is giving you.

The cost of appraisal should around $525 or more.  So, it’s a chunk of change.  Therefore it would help if we know asap if you need order this or not, don't you think?

What do I mean? 

Imagine that you just paid for the appraisal ($525+ out of your pocket), then the next day you find out that there are a lot of repairs needed on the home - large enough that the seller may not do them.  This means the transaction is in danger of falling through.  

How would you feel?

Wouldn’t it have been nice to have a copy of the reports and know if any repairs need to be done before paying for the appraisal?

This is why it’s best to order the inspection as soon as possible.  It could save you time, energy and money!

So, keep this in mind.  With that said, however, the sooner the lender can order the appraisal, the sooner both parties will know how smooth the rest of the transaction will be.  Yes, it is a balancing act.  That's why I'm here - to guide you in the right direction, because there is a lot of steps to buying a house.

Another thing we need to keep in mind is the seller may need to know the value of the home to see if she should agree to any repairs or not.  The seller wants to know if she’s going to have enough money to cover the repairs and still walk away with an acceptable amount.

Catelyn and Ned both interrupted me and asked...

“What If the Appraisal Comes in Lower Than The Agreed Price?”

I answered….

There a few ways this situation this can go…

  • The seller could lower the price to the appraised value
  • You could come up with the difference between the appraised value and the agreed upon price
  • We meet somewhere in between, meaning you come up a little bit above the appraised value, but lower than the agreed upon price
  • Or we cancel the transaction, get your deposit back and move on to another home

Most of the time, the seller lowers the price or you come up a bit above the appraised value.

They both said, “Okay.  I guess we can handle that when we get there.”

"And we will."  I said, then I continued...


We’ll ask for seller to pay for home warranty.  Sometimes the seller will pay for the Home Warranty, depending on our offer price.   However, If they say no, I suggest you pay for one - OR sometimes I will pay for one for you, in certain circumstances.

What’s a home warranty? 

The home warranty is a contract with a company that covers your appliances, electrical, plumbing, etc - typically for a 1 year period.  You'll have to renew every year to extend the warranty coverage.  The warranty covers repairs and replacements.  


"Do you know what Contingencies are?"  I asked.

"Not really.  What is it?" they asked and I answered...

A contingency in the real estate transaction is a clause that gives us the right to back out of the transaction under a specific circumstance - without a penalty.  For example, once we finish with our inspections and we are satisfied with the report OR the seller has agreed to fix any repairs we asked, then we can remove THAT contingency (Inspection contingency).  Later, when we receive the appraisal and the home appraises at the agreed upon sales price, then we can remove THAT contingency… and so on.

Once we remove a contingency, we can no longer use it to back out of the transaction without a penalty.

It order to meet the transaction timelines, inspections and the appraisal needs to be done in a timely manner so we can remove the contingencies on the timeline specified on the contract.  Typically, inspection contingencies need to be removed 14 days after the contract was accepted.  Appraisals are typically removed after 17 days. But, the sooner the  better and all parties will be put at ease.

Most of the time, the inspection (and sometimes the appraisal) contingency is removed after the Request for Repairs are agreed upon.

Quick note... when asking for repairs, we need to make sure that the repairs are done by a licensed contractor.

The Request for Repair form is a form we use to ask for the seller to repair certain items that you feel you need to have repaired.  The items on this form is typically from a list IN the inspection reports and also from my AVID (my visual inspection) report.

Sample of Request for Repair form.

The seller can respond in any number of ways including... 

  • Agreeing to all repairs requested
  • Agreeing to some of the repairs requested
  • Giving you credit for the repairs in lieu of the repairs
  • Or say, “NO.”

Once we get the seller’s response, then we know where to go from there.


Keep in mind that the seller is not trying to pull a fast one on you, but sometimes, for one reason or another, the seller does not want to do the repairs and would rather give you credit in lieu of doing the repairs.  This is fine most of the time depending on your loan.  Some loan programs require the work to be done.

Also, if credit is negotiated, your lender needs to know this and we need to write up an addendum stating the credit.  In that addendum, it’s best to just write it up as “credit” only and not mention anything about what it’s for.   The lender needs to see any addendum to the contract.  If the addendum mentions any repairs, it could open up a big can of worms and could jeopardize the transaction.

The Stark’s heads were getting ready to explode.  I see this a lot with new buyers when they're first buying a home.  I've learned that it’s best that I have all of the steps in writing, thus these articles.

“Whew!  There are a lot of steps to buying a house!” they said.

“Yes.” I answered.  “There is a lot that happens behind the scene, but that’s what I’m here for.”

I told them they didn’t need to know all of this in detail because that’s my job.  However, it is good to know what the process is so you’ll know what to expect next.  It’s my job to make sure this all gets done within the timeline of the transaction.

“Your job" I said, "is to get me, the title company and your lender anything that’s needed to keep the transaction moving forward.”

“That’s great to know…”  Catelyn said.  “And we sure will get you guys whatever you need asap.”

“What’s next?” they asked...  

Go to  Part 1           Part 3

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About the author: All of the articles in this site were written and provided by Rico Castillo (DRE# 01234643) with Coldwell Banker.  If any information is provided by another source, such as the local MLS or by Metrolist, then a disclaimer will be on that page.

Rico can be reached by cell at (916) 934-3146 or email at   Visit his YouTube Channel at

My aim is always 100% client satisfaction by helping you accomplish your real estate goals and finding you the home you've Dreamed about in the area you and your family can feel proud and safe to live in!