Autograph Loan Agreement Made Easy

Autograph loan agreement

Hey guys, Mike Proctor here with Whissel Realty Group. So I've had a lot of feedback from agents asking about how you deliver certain contracts or what you say when. So I just wanted to go through how I do an RPA when my clients and I are going to be submitting an offer. So here we go. All right, so the first form here, we've got residential disclosure, agency disclosure. What this pretty much says is that I have a fiduciary duty to you as the client. It's kind of my favorite word in real estate. In layman's terms what it really means is everything I do has to be at your best interest. So here it just says who I am responsible to represent. Who the other agent is responsible to represent. Just need your autograph here at the bottom. This is the civil code that has to do with agency relationship. If you're ever having a hard time falling asleep and you don't want to drink NyQuil, by all means read through this, you'll be out like a light. Possible representation of more than one buyer or seller. This form is the golden ticket for me being able to go out and find a home for you to purchase. So what you're doing here is you're allowing myself or another agent in my office or brokerage to represent the seller for the property that we're looking to purchase. What this form also goes over is it makes sure that you understand that I'm not going to earmark a property just for you. I have some other buyers that I am working with. And if I find a property and I show it to you, I may be showing it to them as well. Does that make sense? Perfect. Just autograph here. And this form is because wire fraud exists. And they want to make sure that you know about it. So throughout the transaction, throughout the escrow process, you'll be getting emails, you'll be getting people that are asking for all sorts of different things. Now just understand that if you ever have a question about whether something's valid or legitimate, I am your number one point of contact. Okay so don't just arbitrarily shoot money to anybody that's asking for it. If you ever have a question we can go directly down to the escrow office and submit the money. But this is just to make sure that you know that wire fraud does exist. Autograph right here at the bottom. All right, you excited? We're submitting an offer. This is the meat and potatoes of the offer. This is pretty exciting. So let's make sure that we've got the address correct 'cause we don't want to submit an offer on a property that's not for sale yet. So the address is correct. All right and then right you see the purchase price. So we have a total of $505,000. Now we're also going to be offering all of this stuff. So we have to remember that this isn't our contract yet. We still need the seller to accept and acknowledge all of these terms that we're submitting. So we're offering $505,000. We're also offering 17 days of escrow. All right so our term of escrow is here. Shows here that I'm representing you only. And that the other brokerage is representing the seller only. And then here you can see how much we're offering for our initial deposit, our earnest money deposit. This money goes into escrow and it opens escrow and it shows that you're a real person. And you're not just arbitrarily opening escrows. So here you can see that it is not an all cash offer. We do have a loan. And the total amount of the loan goes here. So the initial deposit and the loan amount is the total amount of the asking price. So just initials here at the bottom. Now throughout the RPA, throughout the offer, we're going to be reviewing different contingencies. Just so you understand what a contingency is. These are overlays throughout the escrow process that protect you as the buyer. The first contingency that we're going to review here is the appraisal contingency. This contingency means that you have 17 days throughout the escrow process to get an appraisal on the property to ensure that you're not overpaying for it. Okay? Now if within that first 17 days the appraisal comes back and it's not the price that we're offering, we then have the ability to renegotiate that purchase price. It's kind of exciting right? All right perfect. Now we also have a loan contingency. So within this term here, the first 21 days, anything that goes sideways with the loan. Let's say the terms aren't exactly what you wanted. Or heaven forbid it just doesn't go through and we don't get that final approval on the loan, you're still protected. Within that first 21 days we can say you know what? The loan didn't go the way we wanted it to. Walk away, you get all that earnest money deposit back. We don't have buyer stated financing. We aren't trying to sell a property to buy this one. So there is no sale of buyer's property. And then as we get down to this portion here we get into addendums and advisories. The only additional advisory that we have is the buyer's inspection advisory. We'll go over that in a minute. Down here we're going to start allocating who pays for what and what inspections you want included with the sale of the property. So you can see here that we're asking that the seller pay for the environmental and the hazard disclosures. We're going to be asking for the seller to pay for a wood destroying pest report that's done by a certified pest inspector. Any questions on this here? No? Just initial here at the bottom. Then this portion here we're going to be asking that the seller pay to do any retrofitting on the property that needs to be done by law prior to the sale of the property. There are some counties or cities that require that a property get upgraded with the most water, what is it, water resistant or water saving measures for faucets and toilets and things like that. So if during the inspection process, if the city comes in and says that the faucets need to be replaced or the toilets need to be replaced because of water conservation, this portion here says that we're asking the seller to pay for that stuff before close of escrow. This also ensures that the seller's going to be putting in CO2 detectors as well as smoke detectors in all of the required portions of the home. Down here we get into title and escrow fees. So you can see that we're asking the seller and the buyer to each pay their own portion of the escrow fees. It's very important that we identify this here because the seller does have quite a lot more closing costs than we have on the buyer's side. So we never want to put here that we're splitting the cost. Because then we would be absorbing some of that seller closing costs and we don't want to do that. We're saying here that we want the seller to pay for the title insurance. But we're also saying that the seller gets to choose who they want to use for title. We're also putting here that we want the seller to choose who they want to choose for escrow. Now down here we have identified that the seller is going to be paying all the county and the city taxes. All the transfer fees. If there is an HOA on the property we're going to ask that they pay for that as well. That transfer HOA. We're also asking for the seller to provide us the first year's home warranty and we've identified here that it's going to be an upgraded policy that also covers the air conditioning, and the pool, and the spa. 'Cause we don't want to leave anything out right? All right. As we go down this portion here identifies what appliances we want to convey with the sale of the home. Because if we don't put it in here, they don't have to give it to us. So we want to make sure that they understand all the stoves, all the refrigerators, all the washers, all the dryers, whatever it is that you want in this sale, we're going to put right here so that they get it right up front that we want those with the sale of the home. Down here if you wanted to exclude anything from the sale of the property, if they had a leased solar system on the property. If they had a leased water filtration, something like that you didn't want to convey with the sale of the property. This is where we would identify that. Any questions here? Great, initial here in the corner. So this top portion here just identifies when we will be taking possession of the property after we close escrow. Or we could even allow the seller to remain in possession of the property after escrow. But we're going to identify all that right here in the top. So any other disclosures, it just goes over here as to you as the buyer. What disclosures you're allowed to or that are available for you to review throughout the escrow process that are going to weigh in on the decision on whether or not you want to continue and close escrow on the property. Any questions here? No, you can see here at the very bottom is shows that the seller has the first seven days of the escrow period to provide us with all of the disclosure materials. Okay so just initial here in the corner. We're going to have the first 17 days to review the condition of the property and review all the inspection reports and all the disclosures from the seller. That first 17 day contingency period for all of our inspections will be that opportunity for us to really dig in deep and make sure that the bones of the house are exactly what you're looking for. Does that make you feel a little bit more confident and a little bit more comfortable? I thought it would. Now title investing. This is where you're going to partner with escrow to figure out how you're going to assume title of the property. That's above my pay grade. I'm not somebody that's going to be able to tell you how to take title. So you're going to want to partner with them. Partner with a tax professional. Or if you have an attorney, those would be good entities to rely on. As to what impact the different vestings are going to have on you and your tax liabilities. All right. Just initial here in the corner. So time periods and removals of contingencies. So throughout the escrow period each contingency period is a set time frame. When we come to the end of each time frame, we'll be removing those contingencies as we hit. Okay so once we've reviewed all the inspections and we've reviewed the appraisal and we're okay with any repairs that need to be completed and we've come to terms with the seller. We're going to remove that contingency. Then once we've got the loan all dialed in and everything's approved and we're ready to move forward, we're going to remove that contingency as well. Okay, and that's pretty much what this says here. Now I haven't had it happen to one of my buyers. But I want to give you a heads up. Once we remove those contingencies, at that point if you decide to not move forward with closing escrow, we are going to be forfeiting that earnest money deposit to the seller. And that's for damages from having their home off the market while we've been in escrow. And I'm sure if you were in their shoes you would want some compensation for that as well right? Perfect. So any questions here about how that affects you? No, just initial here in the corner. This again goes over how prorations of property taxes and other items work. Escrow and your lender are going to be going through that with a fine tooth comb to make sure that you have all the financial data that you need. And all that data that you need in order to move forward confidently with this purchase. Again above my pay grade. That's why I surround myself with those experts. So that way they're at your disposal. They're going to be able to go over that with you. And answer any questions that you have about prorations of taxes and things like that. Scope of duty and compensation. Here's the best part for you as the buyer. My compensation is paid for by the seller. So you don't pay out of pocket for my services, which is awesome. Scope of duty. Again it goes back to that initial form where I have a fiduciary duty to you as my principal to make sure that you are protected throughout the escrow period. And that everything I do is at your best interest. All right it's pretty nice to have an agent on your side right? Joint escrow instructions and the escrow holder. So everything we're filling out here. All of these requests, all of this offering that we're giving to the seller. Once approved, this will become the escrow instructions. So escrow is this third party entity that doesn't have anything to do with the buyer, the seller, that other agent or myself. They're completely alone. They're going to get all of this data. They're going to then set up their time frame based on what we've offered and they're going to hold each party accountable to doing what they said they were going to do. They're going to make sure that the seller gets all of their disclosures. They're going to make sure that we've signed off on our contingencies. They're going to collect all of the monies and then they're going to distribute all of the monies and move forward and work with the other parties to make sure everybody does what they're supposed to do. Does that all make sense? Perfect, just initials there in the corner. Occasionally people don't always agree. And what this portion here says is that if we ever run into a situation where we don't agree with them, they don't agree with us, and we just hit this impasse. Before anybody steps into a courtroom, before anybody starts throwing out lawsuits, we are going to go to arbitration and mediation to find an amicable way to figure this out before it has to escalate to any lawsuits. Does that make sense? Perfect. Three sets of initials here. All right. Next. So selection of services and service providers. Now you as the buyer, you are going to be selecting the home inspector that you want to use. You select the lender that you want to use. And then for escrow and title, the seller will be selecting those services. If there are any repairs that are needed throughout the escrow process, you as the buyer are going to be able to select the repair people in order to do those services. Does that make sense? Perfect. Time is of the essence. So everything in this contract is all time bound and time stamped. So we want to make sure that we know what these contingency periods are. What dates those are associated to. And that we're ahead of that curve. That's my responsibility. I'll make sure that we've ahead of all those curves. All right? Now here's a list of definitions of different terms that you're going to hear throughout the escrow process. I always tell my clients keep this handy. Because as it pertains to different things that happen throughout the escrow, it's like drinking from a fire hose. There's just so much data and so many different terms and things to try to remember. It's considerably overwhelming. So it's nice to have this little index of definitions to reference back to whenever you had a question. And of course I'm always here for you as well. No questions here. Here it is, it's kind of exciting. I need your autograph right here in the corner. All right. And then upon acceptance of the offer, we'll be opening escrow. And that's what this portion here says right now. Okay? And this portion here is where the seller is going to be signing the offer to accept it. And then I get to sign right here. And then down here in the corner is where we acknowledge that this is still part of the initial offer. So just initial down here in the corner. Perfect. And then earlier I had said that we're going to come back to the buyer inspection advisory. We found it. What this does is it gives you a cursory overview of all the different types of inspections that are available to you throughout the escrow process. So everything from square footage and boundaries to wood destroying pest report. Oh my goodness I mean just driving around the neighborhood, finding out where the schools are. Finding out where the laundromats are. All of that. That's all part of our inspection advisory process. Okay, just get your autograph here at the bottom. Congratulations. I'm going to get this sent out and I'll let you know what I hear from the seller.