What You Need to Know After You Pick Your New House

You’ve toured the homes and found the one, and suddenly everyone around you is saying EMD, contingencies and Mello-Roos as if you should already know what they mean. That’s the moment buyers tend to go quiet, and it’s exactly when they should be asking more.

Stephanie Haines leads our Riverside team and answers these questions every week. Here are the ones she hears most, starting with the one buyers worry about first.

The short answers

• When is my deposit at risk? Only after you remove your contingencies.
• What’s an EMD? A good-faith deposit held by escrow, generally around 2% of the price.
• How long is escrow? About 30 days for a financed purchase in California.
• Can I lock my rate now? Not until you’ve found a property. Your lender locks it once you’re under contract.
• How much do I need down with FHA? As little as 3.5%.
• Property taxes? About 1.2% in most of Southern California, and often higher in newer communities.

Save this page. You’ll want it again the week you open escrow.

The question buyers lose sleep over

When is my deposit actually at risk?

Your deposit is protected by your contingencies, and it’s only at risk once you remove them.

Contingencies are the conditions in your contract that let you walk away, usually covering the home’s condition, your financing and the appraisal. Once you’ve satisfied yourself on each one and removed them, you’re fully committed, and backing out after that point could cost you your deposit. Every contract has its own deadlines, so go over yours with your agent before you sign anything.

So what is the deposit, exactly?

Your earnest money deposit, or EMD, shows the seller you’re serious and takes the home off the market while you do your due diligence. It’s generally about 2% of the purchase price, and it goes to escrow, never directly to the seller.

And who holds it?

Escrow does. It’s a neutral third party that holds all the money in the transaction and keeps the paperwork moving from start to finish, so neither side ever has to trust the other with their funds.

Between the offer and the keys

How long does escrow take?

In California, a financed purchase usually takes about 30 days. A seller who needs more time might ask for 45, which is completely normal, and when everyone is ready it can close in as little as 17 to 21 days.

What happens at the home inspection?

A licensed inspector does what Stephanie calls a health check on the property, focused on the big-ticket items: the roof, the foundation, plumbing, electrical and the HVAC system. No house is perfect, and the goal isn’t to find one. The goal is for you to understand exactly what you’re buying and feel comfortable with it before you move forward.

Paying for it

Can I lock my interest rate before I find a house?

Not before you’ve found the property. Rates move daily, so once you identify a home and go under contract, your lender locks your rate based on that day’s market.

Is an FHA loan a good option?

For a lot of buyers, yes. It’s a government-backed loan that lets you put as little as 3.5% down, and its rates are often a little lower than conventional ones. Whether it fits you depends on your credit and savings, which is a quick conversation with a lender.

What is PMI, and can I avoid it?

PMI, or private mortgage insurance, usually shows up on a loan when you put less than 20% down. It protects the lender and gets added to your monthly payment. There are programs that let you finance a home without PMI, and we’re happy to connect you with them. FHA loans carry their own version, called MIP, so “no PMI” doesn’t always mean “no mortgage insurance.”

Is there down payment assistance?

Yes, and more than most buyers expect. Some programs are forgivable, meaning you may never repay them if you meet the terms. Others work as a “silent second,” a second loan that sits behind your mortgage. Which one fits depends on your income, the area and the price of the home.

After you close

What will my property taxes be?

Most homes in Southern California run about 1.2% of the purchase price. New construction often runs higher because of Mello-Roos, a special tax that pays for schools, roads and other infrastructure in newer communities. Stephanie has seen total rates of 1.4%, 1.6%, 1.8% and even 2%, so on a new build, ask for the exact rate before you make an offer.

Ask before you sign, not after

Every question here came from a buyer who wanted to feel confident, not from one who was confused. Whether you’re just starting your search or you’re already in escrow, reach out to our team and we’ll walk you through whatever doesn’t make sense yet.

Talk to Our Team