Quick answers
Short answers to common home buying and selling questions
Each answer below comes from one of our plain-English guides. Read the short answer first. If you want the details, open the full guide.
Jump to: Selling a home Buying a home Closing and paperwork Estates, trusts and investment property Home insurance Building and coastal rules
Selling a home
What does it cost to sell a home?
Selling a home has a few kinds of costs. Public fees include documentary transfer tax, a tax charged when a property changes hands. Title and escrow costs vary by company and contract. Escrow is the neutral account that holds the money until the sale is final. Prep and staging are optional. Agent pay is discussed with Weston for each listing.
What does selling as-is mean?
As-is means the seller offers the home in its present condition, usually without agreeing to fix a list of repairs. The seller still gives the disclosures the law requires. Buyers can often still inspect, unless the contract limits that. After inspections, a credit, a small repair or a price change can still be agreed, but only as the written contract allows.
What does a seller have to tell the buyer?
A disclosure is the seller’s written notice to the buyer about the home. Many California sales use three of them. The TDS reports on the home’s condition. The SPQ asks the seller extra questions. The NHD says whether the home sits in certain mapped hazard zones, such as flood, fire or earthquake zones. These forms do not replace inspections. Check the forms with your lawyer and escrow, the neutral company that holds money and papers until closing.
What is staging?
Staging means getting your home ready to show and photograph. It is mostly planning. You clear out clutter, deep-clean, get each room ready for the camera and set up how buyers’ agents book showings. Staging is different from repairs or remodel work. How much to do is a choice made for each home. Staging does not mean buyers are sure to pay more.
What if my home is empty while it is for sale?
If your home will sit empty while it is for sale or waiting to close, most of the work is planning. Call your insurance agent first. The state insurance office says a home policy usually does not cover losses once a home has been empty for 60 days or more. Then decide which utilities stay on, who holds the keys, who checks on the home and how showings run.
Can I sell while renters live there?
Selling a home while renters live there takes planning around the lease, showings and the sale papers. Selling does not, by itself, change the renters’ legal rights. Renters with a lease can usually stay until it ends, on the same terms. Before a showing, you must give written notice ahead of time, during normal business hours. At the end of the sale, the neutral company that holds the money settles rent, and deposits go to the new owner or back to the renters. Confirm the details with a lawyer.
Can I stay in the home after the sale?
A seller rent-back lets the seller stay in the home for a set time after the sale is final and the buyer owns it. A written agreement sets the length of the stay, the rent, the insurance and the utilities. Check it with your lawyer, insurer, lender and escrow. Escrow is the neutral company that holds money and papers until closing.
How do I plan a move to a smaller home?
Downsizing means selling a larger home and planning a smaller next place. Most of the work is putting steps in the right order. First, get the home ready to list. Next, pick an order: sell first, buy first, or overlap both. Selling first can mean a short stay in a rental or storage. Buying first can mean paying for two homes for a while. Before you pick your next home, add up what you keep from the sale. Tax questions go to a lawyer and the Assessor, which means the county office that sets property tax.
What happens when there is more than one offer?
Multiple offers means the seller has more than one written offer on the same home at the same time. The seller often compares price, terms, deposits and timing. The seller may ask for final offers, send counteroffers (written replies that change some terms), or accept a backup offer (one that waits in second place). A spoken yes is not acceptance.
Buying a home
Do I sign an agreement with my buyer's agent?
California buyers now sign a written agreement with their agent. You must sign it by the time you sign an offer to buy, at the latest. It lists what the agent will do, how they are paid, when pay is due and when it ends. It cannot renew by itself. Your agent must put your needs first. If one company works for both the buyer and the seller, it must tell you in writing.
What goes into an offer?
A California offer to buy a home is a written package. It names the price, how you will pay, the terms and the closing date (the day the sale is final). It also lists conditions, called contingencies, such as an inspection, a loan, an appraisal (a check of the home’s value) and a title review. You usually pay a good-faith deposit, often held by escrow (a neutral company). An escalation clause is a line that raises your price by set steps to beat another offer, up to a cap. It does not make sure you win. Check the wording with a lawyer.
What is a contingency?
A contingency is a condition in a home purchase contract. The sale moves ahead only if it is met or dropped. Common ones cover the inspection, the loan and the appraisal (an outside expert’s opinion of what the home is worth). Contingencies are removed in writing. The exact words and deadlines are in your contract.
How does the inspection step work?
An inspection contingency is a condition in the contract that gives the buyer time to check the home. After the inspection, buyer and seller often talk in writing about repairs, credits or a price change. Removing (giving up) the contingency is also done in writing. The exact steps and deadlines are in your written contract.
How does a cash offer work?
With a cash offer, you buy without a new home loan. You still put down a deposit, and escrow (the neutral company that holds the money and papers) still opens. You may be asked for proof of funds, like a bank letter. The written offer can leave out the loan contingency (the loan condition).
What should I know about buying my main home?
A primary residence is the home you plan to live in as your main home. Lenders usually put a home loan in one of three groups: main home, second home or investment property. The group can change what papers you need and how the lender checks the loan. Buying a main home usually means three talks: the loan type with your lender, the offer, and escrow (the period when a neutral company holds the money and papers until closing). This page is not a tax claim or a loan approval. Exact rules depend on your lender.
What is different about buying a second home?
A second home is one you plan to use yourself for part of the year. Buying one is not the same as buying your main home. Four things come up. Lenders sort it as a main home, second home or investment, and that changes the loan review. Read the rental rules of the HOA, which means the homeowners association. Ask about home, flood and earthquake insurance. You may also close from out of town through escrow, which means the neutral company that holds money and papers until closing. Ask your lender, tax adviser and a lawyer about your own plan.
How do I buy a new home and sell my current one?
A move-up buyer buys a next home while selling the current one. You can sell first, buy first or do both deals at once. Which path fits depends on your loan and the contract terms on each side. When one deal depends on the other, the written conditions in each contract matter. A bridge loan is a short-term loan some lenders offer when you need money before your current home sells. Not every move-up needs one. Ask your lender about rates and approval, and a lawyer about contract timing.
What is different about buying a brand-new home?
Buying a new home from a builder is different from buying a used home. You sign the builder’s own contract, and you read it together with its plans, specs (the written list of what goes in the home) and option list. Any change after you sign should be written and signed. Before closing (when the sale becomes final), you walk the home with the builder and list anything unfinished or wrong. Read the warranty papers as contracts. On the coast, ask whether the lot needs a Coastal Development Permit (the permit for building near the coast). Ask a lawyer to review the builder’s papers before you sign.
How is buying a condo different from buying a house?
A condo and a stand-alone house need different checks. With a condo, you read the HOA (homeowners association) papers. That means its rules, budget, owner fees, insurance overview and recent meeting minutes. With a stand-alone house, the checks follow the lot. That means the title report, the survey and lot lines when called for, past city permits, the seller’s disclosures (written notes on known issues), inspections, and the fire-hazard map. Some homes that look stand-alone still have an HOA, so check for both. Confirm with escrow, which means the neutral company that handles the sale, and the listing papers.
What should I check in an HOA?
Buying or selling a condo or a home with an HOA (homeowners association)? Read the association’s papers. The CC&Rs are the rules for the HOA. Also read the budget, savings for future repairs, owner fees, the insurance overview and recent meeting minutes. Each association’s rules can differ. Get current papers from the HOA manager, and ask a lawyer when the meaning is unclear.
Can I buy a bluff or oceanfront home?
Yes, you can buy a bluff or oceanfront home in La Jolla, but the checks are different from an inland home. City rules set new buildings and additions back at least 40 feet from the bluff edge, which is the top of the bluff face. New work on the bluff face itself is tightly limited. Seawalls (walls that slow erosion) and bluff repairs need their own permit, backed by an engineer’s report the City accepts. An older coastal building permit may already limit what you can add. Before you offer, get the full permit history and a current report on the soil and slope from a licensed professional.
Closing and paperwork
What are closing costs?
Closing costs are the fees and charges you pay on top of the home price when a sale becomes final. The main kinds are title costs, escrow fees (what the neutral middleman charges), loan fees if you borrow, transfer taxes and recording fees, and prepaid items. The exact amounts come from escrow, your lender’s forms and your contract.
What is escrow?
Escrow is a neutral holder. It keeps the money, deed and other papers until every step in the written instructions is done. In Southern California, the instructions are usually written after the purchase contract is signed. The buyer’s deposit goes in then. Next come reports, inspections and loan papers. Then everyone signs and the sale becomes final. Your contract and escrow instructions set the exact dates.
What is title insurance?
Title insurance covers claims about who owns a home. Most California home purchases include a title search, a Preliminary Report on the condition of the title, and a policy for the owner, the lender or both. Some items are left out of coverage; these are called exceptions. A lender’s policy protects only the lender. An owner’s policy is what protects the buyer.
What is dual agency?
Dual agency is when one real estate company works for both sides, buyer and seller, in the same sale. California allows it with written notice and written consent from both sides. Without written OK, the agent may not tell the buyer the seller would take less, or tell the seller the buyer would pay more. Whether to agree is your choice.
How do I protect my closing money from wire fraud?
Wire fraud is a scam that sends your closing money to the wrong account. It often starts with a hacked or fake email that tries to change wire instructions. Early on, save the phone numbers for escrow (the neutral company holding the money) and your agent. Before any wire, call those known numbers to check. Do not use a number or link in an email that just asked for a change.
Estates, trusts and investment property
What is probate?
After someone dies, probate is the court process that passes on their property. A judge names a personal representative. That person collects the property, pays the bills and gives what is left to the people with a legal right to it. Not every estate needs full probate. Check the legal path with an estate lawyer.
How does a trust sale work?
A trust sale is the sale of a home that a trust owns. A home held in a trust can often pass without probate, the court process after a death. The successor trustee, the person named in the trust to take over, usually has the right to list and sell the home. Your lawyer checks the trust papers to confirm this. There is no one required timeline.
What happens when I inherit a home?
Inheriting a home from a parent usually means two jobs at once. The first is property tax. Under Prop 19, a California property tax rule, a child may keep the parent’s lower tax value, up to a set limit, if the child moves in as a main home within one year and files the right forms. The second is deciding whether to keep or sell. Take tax questions to a tax accountant or tax lawyer.
What is a 1031 exchange?
With a 1031 exchange, an investor who sells one investment property and buys another can put off (not erase) some taxes, if IRS rules are met. A middleman called a Qualified Intermediary holds the sale money. The IRS gives 45 days to name the new property and at most 180 days to get it. Check every step with a tax adviser.
Home insurance
Does home insurance cover earthquakes?
Most home policies do not cover earthquake damage, so earthquake cover is a separate policy. Most of it comes from the California Earthquake Authority (CEA), a state-run program. You buy it through a member insurance company, the same one that sells your regular home policy. It covers the house, your things, and the cost of living somewhere else. For the house, the deductible (the part of a loss you pay first) is 5% to 25% of the house limit. Homes with a house limit over $1 million may not get the lower choices. You do not have to buy it. A licensed insurance agent gives you prices.
Does home insurance cover floods?
A normal home policy usually does not cover flood damage. Flood insurance is a separate policy. Most of it comes from the National Flood Insurance Program (NFIP), a federal program run by FEMA, the federal disaster agency. You can cover the house, your things, or both. The state lists top limits for one house of $250,000 for the building and $100,000 for your things. A policy usually starts 30 days after you buy it. Look up your lot on FEMA’s official flood map, then check with a licensed insurance agent and your lender.
Is my home in a fire-hazard zone?
Not every La Jolla home is in a state fire-hazard zone. The State Fire Marshal maps zones as Moderate, High or Very High. A zone label shows hazard from the land and conditions around a home. It does not count fixes like clearing brush or fire-resistant building. To check a home, type its address into the official map viewer. If regular insurers will not cover a home, the California FAIR Plan is a backup of last resort. Its basic fire cover is not the same as a full home policy. A licensed insurance agent or broker confirms cover and price.
Building and coastal rules
Do I need a special permit to build near the coast?
Most building work near the California coast needs a special permit called a Coastal Development Permit (CDP). Once the state approves a city’s coastal plan, the city issues most of these permits. In some areas, a City-approved permit can be appealed to the state Coastal Commission. No one can promise how a given project will turn out.
Can I add a backyard home (ADU)?
An ADU is a smaller second home on the same lot, such as a backyard cottage. City rules say it can be 150 to 1,200 square feet. A junior ADU (JADU) is a small unit inside the main house, from 150 to 500 square feet. A JADU must have its own outside door and a kitchen. It cannot be sold apart from the house, and it cannot be a short-term rental. Much of La Jolla has extra coastal rules, so check your lot with the City and a lawyer.
What if my house is 45 or more years old?
Age alone does not make a house a landmark. But in San Diego, a house 45 or more years old can add a step. When you apply for certain building permits on that lot, the City decides if a historic survey is needed. That is a study of the site. Some work is exempt, such as many inside-only jobs and like-for-like roof work. The City has 10 business days to decide for a construction permit. It has 30 calendar days for a development permit. A survey is needed only if the City thinks a historic resource may exist and the project is a big change.
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These answers are general information, not legal, tax, insurance or permit advice.