BUYER'S GUIDE

Finding the perfect property can take time and careful planning. With the California Homes for Canadians Buyer's Guide, the home buying process is simplified step by step, so that you can take an informed approach to buying a home. Whether you're dreaming of a vacation home, a permanent residence, or an investment property in California, we make home buying easy.

STEP #1
CONSULT THE EXPERTS

Buying a home in the U.S., as a profitable investment decision or the fulfillment of a lifelong dream, is exciting, but before making a move, it’s critical that you understand all the legal, financial, tax, and estate implications of your purchase.

Due diligence is key. Speak with an experienced cross-border accountant and a legal professional about your goals. How you own a property in the U.S. and how you intend to use that property, can have significant financial and legal benefits and consequences. Arm yourself with the knowledge needed to make the right decision for your family and your future.

Key Questions:

Ownership Structure: Who will own the property and how it will be titled: individually, partnership, corporation, trust, or a combination of entities? Each structure has different tax and legal implications.

Property Usage: How will I use the property: primary residence, vacation home, rental property? Your usage will significantly impact taxes and reporting requirements.

Tax Implications: What are the US and Canadian tax implications of owning and potentially renting out my property in the US?

Capital Gains Tax: Do I have to pay capital gains tax when I sell my property?

Estate Planning: How would my death affect the property ownership and what are the potential tax implications?

Reporting Requirements: What are my reporting requirements to the Canada Revenue Agency (CRA) and the U.S. Internal Revenue Service (IRS) regarding my US property?

State-Specific Regulations: What are my rights and responsibilities as a homeowner in California?

Investment Goals: Is buying a home in the US the right investment for my financial goals?

STEP #2
NEEDS ANALYSIS

When preparing to buy a property, it's important is to define your needs and wants before you start your search.

What are your must-haves, your nice-to-haves, and your no-way-absolutely-nots?

Would you prefer a single family home, a condominium, or a townhouse? Gated community, golf resort, active adult (55+), HOA-free?

How many bedrooms and bathrooms do you need? Garage, pool, backyard?

What neighbourhood amenities are important to you? Schools, public transportation, shopping?

Do you want to Airbnb the property? Rent the property less than 30 days.

And most importantly, what is your budget?

BUDGET

Every need and want comes with a price tag. Determining how much you want to spend, and how much you will need to spend, is essential. Purchasing a home in the U.S. as a Canadian requires careful financial planning and decision making.

The strength of the Canadian dollar, whether positive or negative, will be the greatest deciding factor for most Canadians considering the purchase of property in the United States. A weak Canadian dollar inflates the cost of U.S. homeownership while a strong Canadian dollar makes U.S. homeownership more affordable. However, because of the substantial difference between the average home price in Canada vs. the United States, many Canadians still find significant savings when the exchange rate is less than advantageous.

More than 60% of Canadian-owned U.S. properties are purchased in cash. “All cash” purchases can save Buyers tens of thousands in traditional mortgage interest and the considerable cost of U.S. mortgage fees. Buying with cash also gives Buyers more leverage in purchase negotiations with the Seller.

If an all-cash purchase isn’t in the cards, there are many excellent financing options that are readily available on both sides of the border. In Canada, homeowners can access the equity in their current home to obtain a mortgage to buy in the U.S., or utilize a line of credit. RBC’s U.S. HomePlus Advantage, BMO’s Gateway Program, TD Bank’s Cross-Border Home Lending, and CIBC Bank USA, offer tailored cross border mortgage solutions to meet the needs of Canadian Buyers. In the Greater Palm Springs Area, we also have many experienced U.S. mortgage lenders familiar with the nuances of Canadian financing for U.S.-based properties.

Whether you choose a Canadian cross-border mortgage or a traditional U.S. mortgage, each mortgage lender will have their own set of requirements, and their available mortgage products will have unique benefits and drawbacks. Investigate your options carefully to determine the right strategy for you.

Once you select a lender, they can help you determine a comfortable budget based on your resources and available down payment, and provide a Mortgage Pre-Approval. A Mortgage Pre-Approval is mandatory when financing a U.S. property. All-cash purchases will require a Proof of Funds letter.

Visit our Mortgages Made Simple page for more information about Canadian and U.S. mortgage programs.

CLOSING COSTS

Whether you’re financing, or paying in cash for your U.S. home, Canadians need to plan for a variety of closing costs unique to American homebuying, and more specifically, the Southern California real estate market. Buyer closing costs in the U.S. typically range between 2% to 5% of the sale price, similar to the closing costs incurred in Canada. The differences lie in the types of closing costs, the distribute of these costs between the Buyer and the Seller, and the requirement to pay them. In the U.S., Sellers typically bear a much larger share of the closing costs, compared to the more equitable split shared in most Canadian provinces. However, the distribution of closing costs in a U.S. real estate transaction can be negotiated based on the strength of a Buyer’s purchase offer, the Seller's motivation, and the overall health of the local real estate market.

Typical Buyer Closing Costs in Southern California*:

Mortgage-Related Fees:
- Loan Origination Fees: 0.5-1% of the loan amount
- Credit Report Charges: $25-$50
- Loan Application Fee: $200-$500
- Mortgage Points: Varies
- Lender Attorney Fees: $500-$1,000
- Property Appraisal: $300-$600

Buyer-Related Escrow Fees: $2.00 per $1,000 of sale price + $250

Lawyer Fees: $1,000-$2,500 (not required but recommended)

Home Inspection: $300-$600

Optional Radon, Lead, Termite and Mold Inspections: $200-$500 each

Prepaid Property Taxes & Homeowner Insurance: Varies

Recording Fee: $75-$225

Beyond the purchase price and closing costs, you’ll also want to factor in the ongoing cost of homeownership in this resort community. While property tax payments, utility service fees, and home repairs are universal, property expenses for a home in the Greater Palm Springs Area are unique to the type of home purchased. Homeowner Association (HOA) fees ($300-$1,000+); Mello-Roos tax; land lease fees ($1,400-$6,000+); increased home insurance and utility costs; and property management and maintenance fees for rental properties, are common overhead costs in this area.

*The above costs are estimates and may vary depending on individual circumstances and market conditions.

LOCATION

When buying a home, you’re not just investing in a house, you’re investing in a community. Choosing the right area for your vacation home or investment property in the Greater Palm Springs Area takes thoughtful consideration and investigation with the help of an experienced real estate professional. Each desert city has its own unique neighbourhoods with advantages and disadvantages that can have a significant impact on your usage and personal enjoyment of the property, expenses and taxation, and rental income.

Visit our Neighbourhood Guide to learn more about the Greater Palm Springs Area’s desert cities and their amenities.

PROPERTY TYPE

Determining the right type of home for your family goes hand-in-hand with the right location. Some cities in the Greater Palm Springs Area will have a larger concentration of affordable gated communities, condominiums, and mobile home parks, while other cities will cater to more exclusive homeownership options. There are neighbourhoods in the Valley dominated with land lease homes, some with Mello Roos tax liabilities, and many with Homeowners Association (HOA) only properties. And for Canadians considering an investment property with short-term rental potential, accommodating communities in the area are extremely limited and and city licensing guidelines are constantly changing. The guidance of a knowledgeable real estate professional is crucial to ensuring you invest the right property in the right area.

What does your dream home look like?

Single family home with three bedrooms; two bathrooms; swimming pool; and a two-car garage? Or maybe a luxurious two-bedroom condominium backing onto a world-class golf course.

What are your non-negotiables?

Low-Maintenance
Investment Potential
Accessibility
Room for Guests
Garage
Backyard
Swimming Pool
Golf Course Adjacent
Onsite Recreational Amenities
Access to Healthcare Facilities

PROPERTY FEATURES

This is the wish list, the wants but maybe not the needs. A Chef’s kitchen, an ensuite bathroom, hardwood floors, a walk-in closet, fireplace, and a wall of windows; all the amenities that make a house a dream home. Making a list of the features you want in the prefect property is a good idea but prioritize them. What are the deal breakers, and do your expectations meet the realities of your budget and lifestyle? It’s not uncommon for a Buyer’s needs and wants to change during the property search. Amenities that you thought were essential may become negotiable, and features that seemed like a luxury may turn out to be necessities. Be willing to be flexible.

STEP #3
SELECT A REALTOR

For most of us, buying a home is the most complex financial transaction we will undertake. Buying property aboard, adds its own complexities. Different laws, different taxes, different expenses, and of course different real estate rules and procedures. To guide you safely through the process, it helps to have an expert in your corner.

We recommend partnering with a licensed real estate professional who is knowledgeable in both the Canadian and American real estate industry to ensure that your interests are promoted and protected. At California Homes for Canadians, our Canadian-born Realtors are uniquely equipped to understand your questions and your concerns. Remember, we were you once – Canadians, California dreamin.

We take our fiduciary duty of care, honesty, loyalty and confidentially to our clients seriously.

Our Promise:

Education and Empowerment
Sound Advice
Comprehensive Due Diligence
Expert Negotiation

We take on the headaches, so you don’t have to.

Your Realtor is someone you need to be able to trust and communicate openly with. You’ll be spending a lot of time with this person, so you’ll want to choose someone that you have a good rapport, who understands your specific needs and who is knowledgeable about your preferred area and the type of property you’re looking to buy.

A great Realtor will also have relationships with established third-party service providers including mortgage brokers, escrow and title insurance companies, home inspectors, lawyers, accountants, contactors and other home service professionals.

REALTOR COMMISSION

Realtors in the US receive a commission for service paid upon the successful completion of a sale. If the property doesn’t sell, the Realtor doesn’t get paid. Historically the Seller is responsible for the real estate commission payable on a transaction, but recent changes to real estate rules in the United State could see a shift in this responsibility. Who pays the Realtors’ commission, like the amount of the commission paid, is negotiable.

Realtor commission amounts are typically a percentage of the sale price, a flat fee, or a combination of both, that is split between the Listing Broker who represents the Seller and the Selling Broker (Cooperating Brokerage in Canada) who represents the Buyer. There is no fixed real estate commission amount in California.

Buyers are required to enter into a written Buyer Representation Agreement with a Buyer Agent before touring properties.

STEP #4
PROPERTY SEARCH

Now that you’ve consulted your accountant and lawyer, determined your budget, and selected a great local Realtor like California Homes for Canadians, it’s time to go shopping!

A skilled Realtor will use a variety of public and private sources including the local Multiple Listing Service® (MLS®), exclusive agent listings; for sale by owner advertisements, and other real estate search portals, to search for properties that match your specific criteria.

Ideally when purchasing a home aboard you’re able to attend property showings in-person. Initial viewings can be facilitated virtually, but before offering on a property, an in-person showing is recommended. We believe it’s mandatory.

At California Homes for Canadians, we make property tour visits to Coachella Valley easy. We’ll help you book accommodations, design the showing schedule, arrange meetings with third-party specialists, and coordinate amenity and sightseeing tours.

During property showing tours, keep in mind your Needs Analysis. Don’t lose sight of what is important.

Finding the right property can take time, and some flexibility. Be open to the process. Each Coachella Valley city has its own appeal and unique character that is worth exploring, and the variety of housing and ownership options is vast. There is something for every budget and lifestyle.

STEP #5
MAKE AN OFFER

You found it, the perfect vacation home or investment property! Time to make an offer. This is when the negotiating skills and experience of a real estate professional really pays off. Your Realtor® will complete a full competitive market analysis (CMA) of comparable current for sale listings and recently sold listings, to establish a fair market value for the home. A fair offer price, will be determined by several additional factors including your individual conditions like financing terms, requested contingencies, added incentives, and closing date; and market conditions like how long the property has been on the market, whether there are competing offers, the state of local real estate, and the health of the economy as a whole. Purchase offers from Canadian Buyers are often very attractive to Sellers as they are predominately “all cash” offers, requiring less contingencies and potential Seller-paid closing costs.

In California, your offer is conferred using the Residential Purchase Agreement and Joint Escrow Instructions (RPA). California RPAs are more dynamic than Canadian Purchase and Sale Agreements. They include an exacting amount of detail to provide clarity and to help protect the Buyer and Seller from unforeseen challenges, and disputes.

Key details outlined in a California Residential Purchase Agreement are:

Purchase Price - your offer amount

Earnest Money Deposit - usually 3% of the purchase price

Expiration of Offer - the deadline the Seller has to respond to your offer

Financing Terms - loan amounts, lender details, etc.

Closing Date - the date you take possession of the property

Items Included and Excluded - commonly referred to as chattels and fixtures in Canada, i.e. appliances, light fixtures, furnishings, security systems, hot tubs, landscaping, etc.

Contingencies - commonly referred to as “conditions” of sale in Canada, i.e. financing, home inspection, appraisal, sale of property, review of title report, Seller’s documents, HOA documents, and disclosures

Allocation of Costs - who pays for each incurred fee, the Buyer or Seller, or both equally

In addition to the RPA, your purchase offer must be supported by a mortgage “Pre-Approval” letter from your Lender, or if you’re submitting an “all cash” offer, a “Verification of Funds” letter from your bank.

Certain required components in the RPA will be new to Canadian Buyers and can cause confusion and trepidation. This is where the help of real estate professional who is experienced in both Canadian and US real estate purchases is invaluable. California Homes for Canadians brings clarity to the complexities through education using contract terms and language familiar to Canadian Buyers.

BEFORE YOU SIGN

Remember, the California Residential Purchase Agreement is a binding legal document. Be sure that you read and fully understand everything outlined in your offer paperwork before you sign it. When in doubt, have your lawyer review the offer documents before signing.

Once your purchase offer is submitted, the Seller can “Accept It”, “Reject It” or “Counter It”.

If the Seller accepts your offer, Congratulations! You’re ready to move to escrow.

If the Seller rejects your offer, you have two options: you can resubmit a new offer, or you can walk away.

If the Seller counters your offer, you now have the option to accept, reject, or counter.

With so many negotiable components included in a Purchase Offer, it’s expected that there will be some back-and-forth with the Seller. A skilled real estate negotiator will advocate for you during this process until both parties reach an agreement or decide to walk away from the deal.

PATIENCE & PERSISTANCE

Offer negotiations can spark many emotions. Remember, there are plenty of fish in the sea. If your offer, on your terms, is not accepted, we keep looking. The right home for you could be just around the corner. A great Realtor will remind you of your non-negotiables and support you through your home search as long as it takes.

STEP #6
OPEN ESCROW

Once an offer is accepted, an escrow account is opened.

What is Escrow?

Unlike in Canadian where a Real Estate Lawyer reviews the Purchase Agreement and all legal documents; arranges for title insurance; ensures are no claims against the property; and warrants clear title to the property on Closing, in Southern California, most of the duties of a Canadian Real Estate Lawyer fall to an escrow company. The escrow company, often selected by the Buyer, but mutually agreed upon, serves as a neutral intermediary between all parties – the Buyer, the Seller, their respective Real Estate Agents, their Lenders, and the Title Company. They collect and collect contractually required funds and documents, mange deliverables, and upon Closing, distribute funds according to the instructions outlined in the RPA. The escrow process spans the time between when an offer is accepted and when possession occurs.

The date that escrow is opened marks the start of the contingency period. Similar to how the “Conditional Period” works in Canada, the Buyer and Seller have strict time-based obligations to complete like home inspection, financing and appraisal, in order to move the sale transaction forward.

The time between the opening and closing of escrow, the full purchase process, is typically 30 to 60 days.

EARNEST MONEY DEPOSITS

Earnest money is the good faith deposit paid upon acceptance of purchase offer. Just like in Canadian real estate transactions, earnest money demonstrates the Buyer’s commitment to the purchase and secures the Seller’s property while the transaction is in escrow. Earnest money deposits are typically 3% of the purchase price and are typically issued by cheque or wire transfer to the escrow company within 1-3 days of a signed Agreement. In multiple offer situations (bidding wars), Buyers will often include earnest money deposits with their offer submission to help strengthen their position. The higher the deposit, the greater the incentive the Seller has to select your offer over another.

Once your earnest money has been received in escrow, it is held until closing and applied to your downpayment and closing costs. Should the sale fall through before closing, depending on the terms of the Purchase Agreement, your deposit may be refunded in part, or in full.

STEP #7
CONTINGENCY FULFILLMENT

Once the Residential Purchase Agreement (RPA) has been signed by both parties, it becomes a legally binding contract. When drafting your offer, your Realtor will include several time-sensitive conditions or “contingency” clauses to the Agreement to protect your interests. Contingency clauses allow a Buyer the time and opportunity to complete their due diligence, and the right to terminate a contract should a contingency not be met or satisfied with a stated timeframe. If the conditions are met or satisfied, the contract becomes fully enforceable and should either party decide to back out, they would be liable for damages. A typical contingency period in California is 17 to 21 days.

The number of contingencies included in an offer, and the assignment of the costs associated with these contingencies, can substantially reduce an offer’s appeal to Seller. Each contingency adds an element of uncertainty to the sale. With multiple conditions of sale that need to be met, the risk of a delayed closing or cancelled contract is greater. In a competitive market, Buyers may need to be strategic with their contingencies in order to secure the sale. However, you never want to enter an Agreement with a Seller feeling vulnerable. Discuss with your Realtor your non-negotiations and explore alternative incentives and concessions that could enhance your position.

COMMON CONTINGENCIES

APPRAISAL

Should you decide to finance the purchase of a home, your Lender will require an appraisal of the property as a condition of your mortgage approval. Property appraisals help protect the Lender’s investment and the Buyer from paying more than the property is worth.

A licensed Real Estate Appraisal will determine the fair market value of your home using recent comparable sales and local market data. If the appraised value is less than your purchase price, you have the option to pay the difference to the Lender in cash, work with your Realtor to renegotiate with the Seller the sale price, or terminate the contract. You also have the option to request a second appraisal of the property, if you believe the appraisal report doesn’t fairly represent the value.

The cost of a property appraisal in California typically ranges between $300-$600 and is usually paid for by the Buyer. A standard appraisal contingency gives the Buyer 17 days to review and be satisfied with the appraisal.

FINANCING

Financing the purchase of a home also calls for the inclusion of a financing or mortgage contingency clause to the Purchase Agreement. While a Pre-Approval Letter from your Lender will outline the loan amount you will likely qualify for, the loan type, and interest rate, it doesn’t guarantee final loan approval. The financing contingency provides you with the time needed to apply and obtain acceptable financing, and protection in the event you are unable to secure financing and need to walk away from the deal.

Financing contingencies are typically 21 days.

HOME INSPECTION

A home inspection contingency is a vital part in the home buying process. In California, all properties are sold in “as is” condition, meaning the Seller is not obligated to make any repairs to the property unless negotiated ahead of Closing. A home inspection of the property can uncover any major repairs or safety concerns that may have been unapparent during your viewing or were undisclosed by the Seller.

A licensed Home Inspector will examine the property’s interior and exterior including the electrical, plumbing, heating and air conditioning, foundation, roof and other structural elements and provide an itemized report of their findings. Buyers are encouraged to attend the home inspection to ask questions, seek clarification, and better understand the property's condition.

Beyond the standard home inspection, specialized inspections for mold, asbestos, lead, Radon, termites and other pests may be required.

If the home inspection report reveals any significant deficiencies with the property, you can choose to proceed with the purchase accepting the home as is, negotiate the repairs with the Seller, or cancel the contract.

Home inspections range is price depending on the size of the property and scope of the examination. Buyers should budget $300-$600 for standard home inspection.

When purchasing a condominium apartment unit, many Buyers will opt to waive a home inspection in favour of a review of the building’s Homeowner Association (HOA) documents. This is as true in California as it is in Canada. However, it’s important to remember that HOAs are only responsible for the maintenance of the building and common elements, anything within the unit’s walls is the Owner’s responsibility. The decision to get a condo inspection, will often be based on the condition and age of the building.

PRELIMINARY TITLE REPORT REVIEW

A preliminary title report provides Buyers with the opportunity to examine the property’s ownership history and identity potential issues such as liens, encumbrances, legal claims, or title defects that could jeopardize clear ownership, before committing to the purchase. If significant issues are discovered during this review, the Buyer has the option to terminate the contract without penalty. The preliminary report is not a complete history of recorded documents relating to the property and is not representation as to the condition of title.

REVIEW OF SELLER'S DOCUMENTS

When buying a home in California, the Seller is required to disclose, in writing, details about the property that may affect the value or desirability of the property. These are called material facts. If the Seller fails to provide the required documents and disclosures, or if the information revealed in the disclosures is found to be unacceptable to the Buyer, the contract my be cancelled or renegotiated.

Common Seller documents and disclosures for review include:

Transfer Disclosure Statement (TDS): The TDS outlines the property’s features, any known damage or defects, recent repairs, renovations and upgrades to the property and its HVAC, electrical and plumbing systems. It also addresses environmental hazards, easements, restrictions and encroachments to the property, lawsuits and other nuisances that may affect the habitability of the property. Sellers are required to deliver the Transfer Disclosure Statement to the Buyer within seven days of offer acceptance.

California Natural Hazard Disclosure Statement (NHDS): Under California law, Sellers must inform potential Buyers of any known natural hazards (earthquakes, floods, wildfires) in the area surrounding the property using the Natural Hazard Disclosure Statement within seven days of accepting an offer. To safeguard against potential legal disputes and empower informed decisions, Sellers are strongly encouraged to obtain a Natural Hazard Report from a qualified hazards expert.

Lead-Based Paint Disclosure & Protect Your Family from Lead In Your Home Pamphlet: Sellers of homes built before 1978 are required to disclose any knowledge of lead-based paint in the home and share results of past inspections or reports, if available. Sellers are also required to provide the Environmental Protection Agency’s Protect Your Family from Lead in Your Home pamphlet, informing Buyers about the risks of lead-based paint and how to protect their family.

Residential Earthquake Risk Disclosure Statement & Homeowner's Guide to Earthquake Safety: For homes built before 1960, Sellers must present Buyers with a Residential Earthquake Risk Disclosure Statement detailing any known seismic risks, along with a copy of the Homeowner’s Guide to Earthquake Safety. Published by the California Seismic Safety Commission, this earthquake safety guide provides homeowners with valuable information on earthquake preparedness and strategies to prevent costly property damage.

Homeowner Association (HOA) Documents: If the property is in a planned community or common interest development, like a condominium apartment or townhouse, Buyers are entitled to receive a copy of HOA’s governing documents, CC&Rs (covenants, conditions and regulations), budget reports, financial statements, reserve studies and insurance documents. A statement of the HOA’s regular fees, pending litigation, special assessments, and any unpaid fees, fines or penalties levied upon the Seller must also be included. Commonly known as the Strata or Status Documents in Canada, review of HOA documents is crucial when buying a condo. While some Buyers made feel comfortable removing a home inspection contingency in a HOA community, review of the HOA documents is essential.

Mello-Roos Community Facilities Act Tax Disclosure: Mello-Roos is a special assessment tax district created to finance local infrastructure. If a property is subject to Mello-Roos or any other special tax, Sellers are required to disclose this information to potential Buyers and make a good faith effort to obtain a “Notice of Special Tax” for the Buyer from the local levying agency.

Notice of Supplemental Property Tax Bill Disclosure: Real property in California is assessed for tax purposes on the date a property changes ownership. Sellers are required to inform Buyers via the Notice of Supplemental Property Tax Bill Disclosure of any estimated property tax increase not reflected in initial tax bill. New Owners can expect to receive one or two supplemental tax bills, depending on the date of closing. It is the new Owner’s responsibility to pay these supplemental taxes directly to the tax collector, not your Lender. Supplemental taxes are based on the difference in value between the property’s assessed value before the sale (current roll value) and the new value at purchase, prorated from the closing date until the end of the fiscal year, June 30th.

California Appraisal Discrimination Addendum Disclosure: California law goes beyond ensuring a property's physical condition is disclosed. In an effort to promote affordable housing and fair housing principles, the California Appraisal Discrimination Addendum Disclosure was created to inform Buyers of their rights should they believe they were discriminated against during the appraisal process. Appraisals must be conducted objectively without consideration of race, religion, gender, national origin, or disability.

SALE OF BUYER'S PROPERTY

Including a home sale contingency would not be a viable option for a Canadian Buyer looking to purchase property in California. Canadians should be confident of their financing before drafting a Purchase Agreement.

STEP #8
REMOVAL OF CONTINGENCIES

Each contingency included in the Purchase Agreement has a deadline, typically 17-21 days from offer acceptance. When the due diligence for each contingency is completed, if you’re satisfied with the results and are no further investigation or negotiations are required, you have the option to proceed with your purchase by signing a Contingency Removal Form (similar to the Notice of Fulfillment or Waiver used in Canada real estate transactions), or cancel the contract without penalty. Once all the contingencies have been removed, you are committed to the purchase and escrow moves ahead to closing. If a Buyer decides to terminate a contract once all the contingencies are removed, your earnest money deposit could be forfeited.

While it’s in the Buyer’s best interest to meet each continency deadline, extensions are common. The burden of responsibility is on the Seller to ensure contingencies are met in a timely manner to move the sale forward. Until the Buyer removes the contingencies, the transaction can be terminated.

STEP #9
CLOSE THE SALE

We’re in the home stretch! Now that all of the contingencies have been removed, the process of closing the transaction begins.

Closing the sale requires a team effort that culminates at the close of escrow, the day the deed is recorded at the County Clerk’s office. The days leading up to the close of escrow are a flurry of activity; you will need to maintain close contact with your Realtor, Lender, Escrow Officer, Title Insurance Agent, and, if required, your Lawyer.

TITLE INSURANCE

In preparation for the close of escrow, the Title Company will complete a through search of all public records to verify the property's ownership history and ensure clear title, free of any legal claims or defects. The purchase of title insurance protects both the Buyer and their Lender from potential financial loss should any unforeseen title issues arise after Closing. In most real estate transactions, two title insurance policies are required: the Owner’s title policy and the lender’s title policy. If you’re purchasing with cash, title insurance is not necessary, but is highly recommended to protect your interest in the title. The standard Owner title insurance, known as a CLTA (California Land Title Association) policy, provides basic coverage. More comprehensive title protection is available with an ALTA (American Land Title Association) policy. Lenders typically require borrowers to have the protection of an enhanced ALTA policy. Title insurance premiums are a one-time fee paid at Closing. In the Coachella Valley, the Seller is usually responsible for the cost of the Owner’s title policy, and the Buyer picks up the cost of the Lender’s title policy, however, these responsibilities are negotiable.

HOME INSURANCE

Although not legally required in California, homeowners insurance is strongly recommended to protect against financial loss due to unforeseen events such as fires, theft, or natural disasters. For Canadians, insurance coverage is essential, especially if the property will be periodically vacant or rented. Content insurance and liability coverage safeguard your investment and provide protection against potential lawsuits. If you’re financing the purchase of a home, most Mortgage Lenders will require homeowners insurance to secure their investment in the property. Consult your Realtor and an Insurance Agent to determine the right coverage for your specific needs.

FINAL WALK-THROUGH

This is your last opportunity to inspect the property and verify that all agreed-upon repairs have been completed and that the home is in satisfactory condition before signing the closing documents and taking possession. During the final walk-through, carefully examine the interior and the exterior of the home, testing appliances, HVAC systems, plumbing, and electrical; inspect walls, ceilings, floors, cabinetry, windows and doors, the roof, sliding, fences and decks, and all fixtures. Bring a copy of the Purchase Agreement, Home Inspection Report, Repair Request Forms, and a camera to document any issues. If you are satisfied with the condition of the property after the final walk-through, or if any promised or newly discovered repairs are needed, it will be documented on the Verification of Property Condition form. This document formally records the property's condition and outlines any outstanding issues. While Buyers are not required to be present during a final walk-through, it is recommended. The inspector who performed the original home inspection, could be employed to reinspect the property.

SIGNING CLOSING DOCUMENTS

It’s time to make things official. With all the Purchase Agreement conditions met, the escrow company will prepare the necessary closing documents for your signature, including the deed, title documents, and if financing the purchase, the mortgage paperwork. Before signing the closing documents, if you have any outstanding questions or concerns, consult with your Realtor or a Lawyer. It is important to fully understand each document.

TRANSFER OF FUNDS

At least three days prior to closing, your Escrow Officer will provide you with an Estimated Closing Statement outlining the remaining downpayment and closing costs to be wire transferred to your escrow account. Any required final adjustments to closing costs will be made at the close of escrow.

LOAN FUNDING

Once the final mortgage documents have been signed, they are forwarded to the Lender for final review. The Lender will review the documents for accuracy and verify the signatures. If the paperwork is in order, the Lender will release the loan funds to the escrow company.

TITLE TRANSFER & DEED RECORDING

In California, ownership of a property officially changes hands when the deed is recorded at the County Clerk’s office. Recording the deed provides public notice of your legal ownership, establishes clear title to the property, and protects you from fraudulent claims and unforeseen liens. Once confirmation of the recording is received, the Escrow Officer will distribute funds from the escrow account to settle any existing liens, property taxes, real estate commissions, and other outstanding debts associated with the property. The remaining balance are the net proceeds paid to the Seller.

Congratulations you’ve bought a home!

Upon completion, you’ll receive a final closing statement and the keys to your new home. It's time to celebrate!

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