Secrets of the Season

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Secrets to Buying a Home on the Oregon Coast

By David Timme, Real Estate Columnist

Many homes along Manzanita's shorefront have this view

So you want to buy a home on the Oregon coast? You have found the property and are ready to make it your dream. There are a number of steps going through the realtor's office, the financial institutions and the escrow services on the way to getting the keys to your new home. If you have someone to show the way, it is much easier to do properly and to get the steps in the correct order and come off looking like an expert.

After locating the property you want, you can sit down with a realtor and make an offer by filling in the papers of the purchase offer. These start with the disclosure statement that spells out the relationship between your realtor and you, the client. You are given a Real Estate Agency Disclosure Pamphlet and a paper to sign and date indicating that you have received the pamphlet and that it has been explained to you.

Then there is the Real Estate Sales Agreement. Currently, there are seven pages of legal text with blanks to fill in, letting you make the offer that you want for the property you have selected. Once filled out, this can be added to in the form of addendums that cover matters of concern that are not already covered in the sales agreement. An example is a professional inspection addendum that will let you have an expert give an opinion on the condition of the home. This lets you, the buyer, know what condition of the house you want to purchase with less chance to being surprised after the sale. There is even a home protection plan insurance available for a modest fee that insures your home will be just as you bought it for a specified period of time.

This beauty is for sale on the north coast

Typically, an earnest money check or promissory note is given by the buyer at the time of making the offer, this is somewhere around one percent of the amount being offered to purchase the property. It is also just what it says it is: money put up to indicate that you are earnest in making the offer.

If all the terms of the sales agreement are satisfied and you decide to withdraw the offer, then the earnest money could be forfeit to the seller. This earnest money is generally held at the real estate office until mutual agreement is reached, and at that time it is turned over to the escrow office and then deducted from the purchase price.

A down payment is also made at close of escrow. This is money to reduce the amount of the purchase loan to a level the lender will support. The amount of the down payment is determined by and can be quite different from lender to lender, depending on the type of loan used to finance the property purchase.

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Once mutual agreement is reached, the inspections can take place and anything negative found during inspection can be a matter of negotiation. These can be entered into an addendum to the sales agreement. Once agreement is reached on a solution, it is signed and becomes part of the agreement. Or, if the offer is below the seller's asking price for the property, a sellers counter offer can be made indicating the seller's position. The negotiation process can continue with a buyer's counter offer. This process continues until an agreement between the seller and the buyer is reached or a sale fail occurs where one of the parties withdraws. When the offer made is mutually agreed to, then the process stops at that point and goes to escrow.

The escrow service acts as a neutral third party that makes sure the terms of the sales agreement and associated addendums are in place. Of course they do this for a modest fee to cover the cost of their services. They bring together all the papers and funds for the transaction from the realtors for the buyer, seller and the lender. The seller gives title of to the property to the buyer and gets his purchase price - less any deductions. The buyer gives the balance of the purchase price and gets title and keys to the property. The escrow officer ensures that all the papers are signed in the correct places and disburses checks to the involved parties to cover commissions, fees and other associated costs.

Once the process is complete, everyone is a winner. The seller has his sale proceeds; you the Buyer have your new home at the coast; and the service industries collect their fees. To simplify your part of the process, see a realtor to find what is available, help make the offer, and finalize your purchase.

This is an ongoing column discussing subjects of interest relating to Oregon Coast Properties. In future issues, we will be covering other home-buying subjects. Generally, we will cover anything of interest to someone looking for property in this area. If you like my column, see my web site here.

Letters to this column will be answered - or the subject matter covered - in future issues.

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