HANNA MUSIDI:
hi my name is Hannah and today we have our US tax expert Derren we also have our U.S. real estate and legal expert Jay and we will be discussing the buying process for Asian investors who would like to invest in the U.S. real estate
VOICE-OVER:
This podcast channel it’s about you, successful international entrepreneurs, successful ex-pats, successful investors. Sponsored by HTJ.tax
DERREN JOSEPH:
Jay. Great to see you again. So, for those who have not seen the episode that we did before. Could you please briefly introduce yourself again?
JAY KNIGHT:
Sure. My name is Jay Knight. I’m an American citizen that is living and working abroad currently now in Indonesia. And we have been doing, we’ve been talking about real estate and different phases of real estate. So I guess we will continue along those lines today.
DERREN JOSEPH:
Okay, fantastic. So, all right. And again, you promise me that you wouldn’t laugh at my questions because they’re going to be really simple. I’m a first-time buyer. I’m not from the US. Maybe I’m from Singapore, Malaysia, Indonesia. I found someone who’s licensed someone who’s a professional and they follow me the right property and I’m ready to take action. What should I do? Should I just wire them the money? What are the next steps in the buying process?
JAY KNIGHT:
All right. So yeah, so let’s talk about this process because this is good, it’d be the first step is going to be a very important step for a lot of different reasons. And as a tax professional, you could probably talk about some of those, but I think that the first question you have to ask is how do you want to hold the title to the property that you’re going to buy? Is this property going to be a property that you’re going to use for your own vacation residence? Is it going to be a property that you’re going to move into? Is it going to be a property that you’re going to use strictly from a business standpoint, either running a business or renting it out as a business? So all of these types of questions, you have to first determine yourself. And once we can determine that, then we have to ask, well, how do we want to hold the property? So this is always a good starting point. So you could hold it in your own name, or if you have a business you might want to hold it in the name of the business, or you may want to set up a new business that’s strictly used for this property. So I would say that that would be the first step that we would want to kind of get through to determine how best and what is the most way to protect ourselves, in this new venture. So, you know, you could probably talk a little bit about the tax implications, but maybe we can go over that in another time, but if you want, but yeah, so that, that would be the first step that we would want to kind of get through.
DERREN JOSEPH:
Yeah. And that is, as you pointed out, that’s a huge topic in itself for those who are doing investment property. Obviously, we always recommend using a structure using an LLC, and it’s not so much an issue of tax, but as you point, as you write, you repeat it a few times is about protection. And, you know, I think we mentioned in the previous talk that we did in this series, that it’s really important to have both an accountant and a lawyer who are both US qualified to advise you through a process like this. And you need both because while a CPA or an accountant can advise on tax, they know very little about asset protection. In fact, I think it was Robert Kiyosaki who joked that CPA stands for cons protect assets. Whereas a lawyer may be really good. A legal consultant will be really good, you know, protection, but, you know, I know some of the tax implications, especially if you’re buying from a high tax jurisdiction like Indonesia and Malaysia, so definitely some consulting around protection and the protection isn’t just, and again, we were going to this detailed perhaps in the next one, but there’s insight protection. So protection against, you know, your tenants slips and falls. They don’t want them suing you and there’s outside protection. So you don’t want any external party, whatever grievance you may have in other lines of businesses coming over and suing and having a claim on these assets. So definitely something to talk about, but let’s assume that we’ve had that figured out. So I’ve decided I want to buy it in an entity, some structure, what do I do next?
JAY KNIGHT:
All right. So I guess the next question would be then, are you going to pay for this property in cash? Or are you going to try to go through a bank or mortgage company and finance the purchase? So again, this again will be something to put, you know, based up for your own decision, but if you are going to get a loan, then there’s a whole different set of procedures and everything else that we could go through. But if you, and a lot of overseas people, they do like to buy in cash. So if you’re going to buy in cash, that makes things a little bit easier and gives you a little bit more flexibility.
DERREN JOSEPH:
Yeah, I guess in our practice, just drawing from a real-life example is we have clients, obviously in Singapore, Indonesia, and as far north as Hong Kong, we don’t have any clients in mainland China, but in Hong Kong. And they’re all buying the old tend to buy cash. So I guess maybe we can proceed based on that understanding.
JAY KNIGHT:
Yeah. I mean, we do see that a lot of people from OSI overseas, come in and they just want to buy an all-cash, which gives them a lot of leverage. And of course, for the seller, that’s the best news that they can hear. Right. So, cause they don’t have to deal with all this other stuff regarding a lot of that paperwork and having to go through all the contingencies of getting alone and all the process there. So, okay. So let’s proceed then under that understanding. So once we have that understanding that we’re going to pay cash and we have found an agent or professional licensed professional that you feel comfortable with and you trust and you want to use to help you facilitate, then the next thing is really just trying to make sure that you find the perfect property that you’re looking for. Right? So this is where having a licensed professional really will be helpful because based upon the information that you provide them, they can really tailor whatever searches that they’re trying to do to be able to find the best and most suitable property for you. So there are all kinds of different things that could be, you know, people are looking at a property, right? So I mean, some people may want to have a balcony or a pool or an end unit or a two-story building. You know, I might want to be near a school or near a university, say, for example, if you want to use it as a rental property, having it next to a university or a college would be a good idea because there’s always going to be students in need rent. So there’s a lot of different variables, but the more that you empower your agent with information, the better that they can help find the perfect property for you.
DERREN JOSEPH:
Okay. So, I’m comfortable with him or her and they found me something. I like it. What do we do next?
JAY KNIGHT:
Alright, perfect. Well now, this is the fun part. So what typically will happen is that you will find the property you want. And if you think that the price, whatever the price is, you will tell your agent or your broker say, Hey, this is a property let’s make it happen so that your agent or your broker is then going to do, what’s called a, make an offer. Making an offer is actually writing up a legal form. That’s provided through certain standardized real estate forms. And they’ll write out an offer for the price and everything else that you may want to put in there. It, and then your agent will send, send it over to the, to the seller’s agent. And then what will normally happen is a couple of things. One, the seller’s agent and the seller will review the offer. They can go through it and they like it. They’ll accept it. Great, easy peasy, no problem, but they could most likely. And what normally typically happens is that they will send back what’s called a counteroffer. And what that means is, is that maybe they’ve agreed to some of the terms that you’ve put in your offer, but not all the terms. And it could be the price difference. It could be how much money you need to put down in terms of your deposit. It could mean how, how long the transaction can be. Let’s say you put in your offer that you need two months before you can close because you’re buying this property contingent on some other things, maybe selling a house that you already own. So you free up some cash that you’re gonna use to this, whatever it may be. So there are different contingencies that could be put in there, which they may not agree to. So they may send you back a counter offer saying, okay, well we agree to the price, but we need you to make it so that the property will close within three weeks, as opposed to maybe you’d put in there a month and a half. So whatever it may be so they can send you a counteroffer. Now it could just be strictly based upon the price, which is often the case. You put an offer for $400,000 and they want to put it in for, they want to counter you back at 420, something like that. So that’s, that could be one alternative that they counter you back. Doesn’t mean that they’re, they’re saying no to you. They’re just saying that this offer, the way you have right now is not going to be acceptable at that exactly. The way you put it, they could also reject your offer altogether. Now that could be for different reasons as well. Maybe the other offers were already higher. Yep. And so they’re not gonna really consider your offer or maybe it could be for yeah. A lot of different things. So this would be the main thing that happens, put an offer. Or, and then you wait to hear back, they gonna accept it or they going to reject it and or they’re going to counter you. And once they counter you, if that’s the case, you can actually count them. You can actually book counter to their counter and go back and forth until you guys eventually have a meeting of the minds and agree to all the terms.
DERREN JOSEPH:
Okay. So at this point, I haven’t made any deposit or anything. And my lead binding, like, can I just, even if I, if I said like 400, as you said, and they said, okay, let’s go for it. And then I’m like, well, I don’t want to, I don’t want it anymore. I found something that I liked better down the road. And I back out of any implication to that.
JAY KNIGHT
All right. That’s a great question. So if you send them an offer, okay. And they accept your offer, but you have it. It’s just a verbal agreement of acceptance. Okay. At that point, you are not really at risk. Okay. No verbal agreements can be considered to be legally binding, but in this situation, there really isn’t anything that they can do and your recourse. So, because nothing has really fully been signed. Now, if you guys agree to terms and then a written purchase contract is written up based upon those mutually agreed to terms and both parties sign it. Now you have a purchase agreement, which is a legally binding contract. Okay. But now, but now, now you are illegal
DERREN JOSEPH:
The question, because previously said, when, when we do the offer, it’s going to be on a template provided by a broker agent or whatever. So it’s writing. But even if it’s in writing, it’s not yet legally binding, correct?
JAY KNIGHT:
Correct. Because you guys have not fully entered into a purchase contract. All you have done is simply give them an offer. And even if he sends back a verbal acceptance of that offer, there isn’t any full committed purchase contract signed by both parties with those exact terms. Okay. Once we’ve gotten to that point, then yes, we have a, a, a fully binding legal contract. And normally if that’s the case, once we reached the contract phase of the contract for just contract based on the offer and the acceptance, there was a deposit amount that was mutually agreed upon. So let’s just say it was $25,000. Okay. If later on, you decide as the buyer to back out of the contract, for whatever reason, maybe you had an emergency situation where you had other expenses that you had to account for or whatever the case may be. And it happens quite a bit. But at that point, since you are in a legally binding contract, you will forfeit the deposit monies that you have put down as you back out of that.
DERREN JOSEPH:
So just to be clear at the point where the deposit is paid, that’s when it becomes legally binding, right?
JAY KNIGHT:
Okay. So actually what happens is, is that yes, that’s correct. The deposit will be paid after there’s a signed purchase agreement between the two parties. So it becomes legally binding as a contract once that has been signed that contract. But typically it’s usually a day or two after that contract is signed, that the deposit is made. So technically it becomes legally binding once the contract is signed, but normally the deposit isn’t paid for another day or two.
DERREN JOSEPH:
Right. Because, you know, I mean, this is like taking me back quite a few years now. But when I did like back in business school, that one module that we did on contracts, it was offer acceptance consideration intention to create legal relations. Right. So there’s no consideration, but even though there’s no consideration on the form of a deposit being paid, it still is you still have a binding contract, right.
JAY KNIGHT:
That’s correct. Absolutely. You have a binding contract that is, that has been signed. So what is a written contract that has legal binding to it.
DERREN JOSEPH:
Okay. Gotcha. Yep. Okay, great. Yeah. So we’ll work that out. So now it’s a done deal. I’m not backing out and sending the deposit. No. The thing is that sometimes with, with foreign buyers, sometimes they, the agent, or whoever in the US is insisting on sending 100% of the purchase price upfront is that, should I should not create red flags or is that normal or is that abnormal?
JAY KNIGHT:
All right. That’s another great question actually because things are done a little bit differently in terms of how purchasers are in the United States, as opposed to what I’ve experienced so far in Asia. So typically what will happen is this, I think we’ve touched on it in our last segment. There’s a, there’s a, a process which is called the escrow process. An escrow is a company that’s specifically designed to facilitate the smooth transactions of real estate and what it is, it’s a third party. So it doesn’t represent the buyer. It doesn’t represent the seller. It’s an independent third party and its job is to facilitate the sale. So one thing is, is that when you are instructed to make that deposit, whatever the amount was that deposit should never, ever, ever be wired or sent directly to the buyer or to the stellar, sorry. Okay. Never. And that’s the whole reason why they have these escrow companies. The escrow company is where you’re going to send your deposit. And that deposit is going to be put into a separate escrow account and is held in that escrow account until the final end of the transaction. So that deposit will never go to the seller while the escrow process is ongoing. So there is anyone who ever tells you to send me a deposit or send me the full amount. 100% of it upfront to me directly or to my business definitely is a red flag. And you should run from them as fast as you can. Absolutely.
DERREN JOSEPH:
Okay. That’s good to know, like as a teaser, anyone that’s watching and listening, we’re going to go into some case actual real-life cases that are being litigated right now where isn’t buyers have had, let’s say misunderstandings in purchasing US real estate because they didn’t follow these basic principles. So, this is good to know and to keep in mind. Okay. So it’s an escrow. What comes next?
JAY KNIGHT:
All right. So you’ve wired those deposit funds to an escrow company. Now, the escrow company, even though it’s a third-party agent, typically what happens is, especially if you are an overseas buyer, you are not going to know or have any connections, most likely to an escrow company. So typically in that situation, we do allow it’s customary to allow the seller to choose the escrow company, maybe that maybe they have worked with that company before. So it could be a good thing actually because they know exactly how to work with this seller and how to get everything done. And they have a process in place. So the seller, even though is not being, it’s not paying them directly. He does have some leniency in terms of being able to choose the escrow company to handle the transaction. So once we open up escrow and the money has been deposited, then the next thing that happens is that the seller will provide to the escrow company, all the paperwork and all the disclosures about the property. All right. So he’ll give them disclosures about it, could be a lot of different things, but mostly it’s going to be about, is there any kind of defects to the property? Okay. Is there any kind of environmental hazards, is there any kind of structural damage? Is there anything that’s been done underneath the property in terms of, of, of hazards or, or any kinds of things that was found there that could be dangerous or legally in California, they also have to disclose whether or not someone actually has passed away on the property itself? So all of these things are disclosures that a seller will then have to give, to the escrow company that can be reviewed and known by the buyer. So it’s really there to protect the buyer.
DERREN JOSEPH:
So seeing that escrow, so set a critical purpose, a role in this process, how does do I, as a foreign buyer, know that this escrow company that you, the sellers recommended is legit, suppose it’s your buddy next door, right?
JAY KNIGHT:
Right? And, and truthfully, there, there is sometimes not unfair or, or, or bad dealing between the seller and Asheville company. That’s not really, we find that because they both are independent parties, but sometimes we will find that it could be, they’ve done a lot of real estate transactions and they just are comfortable using that escrow company because they know the people and they know how to get stuff done. But the impact of your question, the way that you can know how credible it is is that your agent or your broker will also be able to have communication with them. And he can do dealer. She can do due diligence about that company. She can find out, is there a company ever been suspected of any kind of shading ass or anything like that? So it really will come down to your agent or your broker also doing due diligence on the company. And if you really object to that company, because the agent that you have as found, there’s been some sort of things in the past, well, then you can object to it and ask that, Hey, look, we don’t want to use this. Escrow. Let’s find a different one. So you do have some say in the matter, but as I said, it’s just customary that the seller usually gets to choose it, but it’s not set in stone. And there are ways to object if your agent feels that there would rather do business with the difference for the company.
DERREN JOSEPH:
Okay. So that’s, I guess that’s another important tip that you’ve just given and that your agent doesn’t disappear once he’s he or she introduced you to the seller, right? They need to stick with you in the process and make sure everything goes through the completion, right?
JAY KNIGHT:
Absolutely. They have to be there every step of the way, especially a zoo, being a foreign buyer and not being able to get hands-on stuff all the time. You’re really using them at a much more crucial way. And they have to be the eyes and ears for you and everything. So their relationship and their ability to know what’s going on and being able to, you know, do due diligence and help you in every aspect. And every facet of the transaction will be critical. So a good agent is going to be a critical part if you’re buying from overseas for sure.
DERREN JOSEPH:
Right. And in terms of the fee, like what is customary? What is, what is the range that you’d probably be needing to budget to pay, and who pays? Is it one buyer seller or both?
JAY KNIGHT:
All right. Great. That’s another good question. And again, this is something that people get a little bit confused about. So for the escrow company, there are of course fees. No one’s going to be working for both of you and not have any kind of fees. So at the end of the escrow, when the property is being transferred, okay, and everything is going to close, there’s going to be a quote-unquote, a closing date where everything comes to a head at that time, there are going to be fees that are going to be owed to the escrow company. Now, some of those fees are going to be owed from the seller. Some of those fees are going to be owed by the buyer. So our fees involved, a lot of times will partially depend on the purchase price of the actual property. So there isn’t any really hard and fast standardization of what those fees will be. They will differ some Astro companies charge a lot. Some Astro companies don’t charge as much, and then there’s going to be other different fees as well that we can talk about it when we get down to it. But there’ll be other fees as well. However, if you have a good agent who knows what they’re, who knows the process, and has done this before, they can object to certain fees and have them get it thrown out because sometimes they ask, well, of course, that’s what companies like, anything else, it wants to make money. So if it can throw on an extra fee, or an extra fee here and next, you know, they will, they will try. Some of them will try to do that. That’s just part and parcel of how escrow companies work. But again, your, your, your agent, or your broker can object to some of these negotiate, some of those fees too, to get rid of them. But yes, there will be these and it, again, it will depend on the, on the purchase price. And it also will vary between different escrow companies.
DERREN JOSEPH:
Gotcha. Okay. So I have an Asian broker or whatever that I trust and guided me through the process. I’m comfortable that the escrow company is doing its job. The seller is doing the right thing. We’ve come to closing what happens next.
JAY KNIGHT:
All right. So, well, first of all, well, there are a couple of other steps that we’ll probably we’ll need to go through before we actually get to the closed. One of those steps. Again, this is still under the umbrella of the escrow and the escrow company will handle a lot of this, but one of the steps is, is to get the property inspected. Okay. Why is that important? It’s important because even though you get this disclosure, from the seller about all the things that were wrong with any environmental problems, if any, anything like that, we have to do our own due diligence as buyers and get the property properly inspected. So what does that mean exactly? Well, you’ll hire someone to go out there and do a full inspection of the property. So you got to make sure that there’s no structural damage. We have to make sure that there aren’t any repairs that are needed. They have to make sure that maybe the roof doesn’t isn’t leaking or the chimney doesn’t need sweeping, or the sewer has got some backup problem or the air conditioners don’t work or whatever it could be. So we’ve got to get all that inspected. Now, once that’s inspected, if there are problems with these things that need repairs, we can go back and renegotiate the actual price of the property to offset whatever the cost would be to get these pairs fixed. That makes sense.
DERREN JOSEPH:
Sorry, just to be clear, the report would not just include the deficiencies, but it will give an indication as to how much it will cost or make them, right?
JAY KNIGHT:
Yeah. Okay. So the inspection will just tell you what’s wrong with it. Okay. It doesn’t necessarily, we’ll give, we’ll tell you what the cost of the repairs will be, but it could depend, but that is something else that we could also get done, get someone to give a fair market value of those repairs. Because again, that will be dependent upon the area, the city, the contractor, a lot of different variables, right? Because you can, you can get 10 people to give you 10 different estimates on what it will cost to fix it, fix a leaking roof. Right. So, but yeah, so, but the point I guess, would be, is that that inspection is crucial and cannot be forgotten in this process. They have to get to the house inspected right.
DERREN JOSEPH:
And then, of course, you’d be doing other things, presumably like checking whether the seller has the right to sell it, whether it’s encumbered in any way.
JAY KNIGHT:
Absolutely. Absolutely. So really the next thing that we would do after we got it inspected is then would get it appraised. And what I mean by praise is we would, we would actually hire an appraiser that that’s specifically someone just in terms of the terminology. An appraiser is someone who goes out and appraises a house or a property to find out what its fair market value is. And there are different ways to appraise. And we could do a whole segment on the different theories and the different appraisal methods. There are different methods that, some appraisers can use to come to the fair market value, but that’s another segment for another time. But the point of it is, are you gotta get it appraised because why a, if this, if the seller is selling it for 450,000, we’re getting it appraised, but it only comes in at 400,000. Now we can still go ahead and buy it. Maybe it’s a seller’s market. And we know it’s going to go up and, and appreciate it quickly. And there are three other offers that are, on the table. And so we had to spend more money and give a higher offer just to get into the property. Okay. So we can do that. Right. But if on the other hand, the property value is fair, markedly, appraised, significantly lower. It may, we may want to come back and renegotiate with, with, with the seller about, about the price. Okay. So getting into praise is going to be extremely important. Now, if it does appraise fine or we’re okay with that, whatever it is, then the next thing we need to do is we need to buy a homeowner’s insurance policy. You mentioned earlier in one of your, one of the questions about how, if you have a renter in a property and they slip and fall, you know, w w when we were talking about structures, the first question, so we want to make sure if we have a homeowner’s insurance policy that in case we do have right. Pitchers, we have we’re covered, right that we have insurance on the property.
DERREN JOSEPH:
Hmm. Okay. So insurance, and then what?
JAY KNIGHT:
So then that comes to what you had mentioned in the last part was we have to get, what’s called a title report. So a title company, again, this is all going to be still in the escrow process, but a title company is a separate company that often has a hand-in-hand relationship with the escrow company, because they work so closely together, or they could just be a completely separate company. But the title company, what they’re going to do is they’re going to make a report and a finding of the property itself to make sure, as you mentioned, that the seller is the actual legal owner of the property, or that there isn’t any back taxes owed, or any encumbrances and taxes, judgments, HOA dues, anything like that, that is actually on the property that would make it harder to, to deal with if we are going to buy it. So we get a title company title.
DERREN JOSEPH:
For those who have been listening HOA would be homeowner association dues, right?
JAY KNIGHT:
Exactly. Or it could be considered condo dues. It depends there’s different terminology, but right.
DERREN JOSEPH:
Yeah. Sorry.
JAY KNIGHT:
Yeah, no problem. So, so once we get that title report, and if it comes back as being clear, then we know that the title is good. We don’t have any issues with the title. We can feel comfortable moving forward. And then what we would do is we would purchase a title insurance policy, which would protect us, the buyer against any kind of legal claims that may come up that the seller didn’t know about. Okay. So it’s just for our own protection and our own peace of mind.
DERREN JOSEPH:
So are we ready to close yet?
JAY KNIGHT:
We are ready to close. So there are, quite a few steps, but all these steps are really there for the protection of both parties, but most specifically for the buyer, right?
DERREN JOSEPH:
Okay. So everything comes back with the right results and everyone’s comfortable with the process. Then, money that’s held in escrow is released to the seller and the buyer gets legal possession, the property, right.
JAY KNIGHT:
That’s correct. So what happens is, is as a couple of things, one right before the close, right. They’ll usually set a date like a closing date is January 18th. Okay. So usually the 16th or the 17th, or it could even be on that 18th, we do, what’s called a final walkthrough. And what this final walkthrough is, is that the buyer, or in this case, maybe his agent, if he’s not in the country, we’ll go through to the property, inspect it one last time to make sure that there aren’t any issues with the property.
DERREN JOSEPH:
I’m so sorry. I just want to touch on a point that you just mentioned. Do I need to fly from, if I’m in Singapore, do I need to fly into the US or can the agent just do everything for me?
JAY KNIGHT:
The agent can do everything for you, but in order for that to happen, you would need to sign a power of attorney. Okay. And typically what happens is, is that the agent isn’t really the person that you would have done that, although it’s possible, it would be better if you had a non, a person that was not involved. Right. Like I’m like a nonparty, a non participating in a party. They could do that.
DERREN JOSEPH:
Okay. So that will typically be a legal professional finance accountant. Okay. Gotcha.
JAY KNIGHT:
Yeah, absolutely. Now the other thing is though, is that they do have a lot of technology now that allows you to sign a lot of these documents yourself through the technology. So instead of having to be there and fly there, you could actually get, be able to sign a lot of the documents that you need to be signed through online technology.
DERREN JOSEPH:
Okay. So like Adobe DocuSign or something like that. Okay. That’s good.
JAY KNIGHT:
And the technology used you go ahead. Yeah. I mean, the technology they use in real estate is already set up for these types of purchases. So they have a built-in, so it’s usually not a problem. The other thing is they do need to be notarized, which again can be done in a similar fashion.
DERREN JOSEPH:
And would that vary by state or is it pretty universal?
JAY KNIGHT:
It will vary by state. So I’m talking specifically about California. Gotcha. Okay. But, but it will be similar. Some of the states may not have the same advanced technology, but I would imagine most of them probably would.
DERREN JOSEPH:
Okay, good.
JAY KNIGHT:
I get someone to sign, a power of attorney and they represent me on this final walkthrough. Or we use technology. We use zoom, we sign stuff online. What happens next? Alright. Alright. So the final part then will be once the walkthrough was completed and everything’s fine, all the final documents are going to be ready to sign next. What we’ve just alluded to. So both parties, as I said, they usually set a date. Both parties are going to come to the signing either through technology or into the office itself, sign all the documents, what all the documents are signed, then the money is transferred. Okay. So if you’ve already put the deposit in that money, but then the rest of the money also needs to be transferred. So it could be, you could, it could be, you could wire it to them on that day to, to the, to the escrow company, again, not to the buyer himself, but to the escrow company. And then the actual company will release all the funds to all the different parties. Okay. So they’ll get everything paid. And we talked a little bit before about the title company, the title insurance, the homeowner’s policy, then the inspection. So all of this will be paid out of the escrow. Okay. So this will, so for example, maybe it will cost $6,000 to do all that. Sometimes they’ll take that out of the deposit and pay it all. And then we still got to come up with the rest of the money that’s owed at the time of the closing. So these costs are going to be burdened by the buyer, for example, the inspector to go and inspect a property. That’s going to be something that you want as a buyer for production. So that’s something you’re going to pay the title report again, to make sure that everything is clear that’s for your protection. So that’s going to be something that the buyer’s going to pay the homeowner’s insurance policy, again, your protection. So all the, all those things will be the cost of the buyer. Now let’s talk about the fees for the commission, for the agents, and the brokers. Cause this is something that people are always asking about. And they’re not always clear because it can change depending on the state. So in California, as a buyer, you do not pay any of the fees, even for your agent or your broker. So you don’t pay for those. Now that will come from the seller, the seller actually pays your agent. So you don’t have any, yeah. You don’t have any fees to pay the agent or the broker, right? So those are not your burden. Those are not yours. After all, this is done, then the keys are handed over to you. Now you got the keys and they will, the escrow company will record the new deeds with the county or with, with the city, normally with the county. And after a couple of months, you will get a brand new recorder deed that says you are the legal owner of this property,
DERREN JOSEPH:
But I don’t need to wait a couple of months, right.
JAY KNIGHT:
That’s when you’ll get the original new deed counties to work, it just takes, it just takes time. But you’ll get paperwork that shows obviously that, that you, that you are the legal owner, but the actual lead, the original new deed will come usually depending on the county, but could be anywhere up to two months.
DERREN JOSEPH:
Now, are you the owner of the property? Fantastic. Happy days. So I think that’s grateful for where we are right now. And I look forward to our next episode where we talk about structuring the transaction.
JAY KNIGHT:
Lecturing transactions and even a few case studies.
DERREN JOSEPH:
Exactly. Fantastic. Jay, we appreciate your time, your insight, your expertise. Thank you very much.
JAY KNIGHT:
Absolutely. All right, buddy, you got any time could talk with you.
VOICE-OVER:
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