Buyer Q & A
Serious Questions Buyers Ask Before and During the Process
The right time to ask is before you act.
Buying property raises questions that are often overlooked at the beginning. This page addresses complex topics in an organized way, so you can think clearly before time runs short.
• Some involve structure.
• Some involve tax and title.
• Some involve a financing strategy.
• Some involve negotiation leverage.
• Some involve long-term consequences.
• Some involve tax and title.
• Some involve a financing strategy.
• Some involve negotiation leverage.
• Some involve long-term consequences.
Q #1. How should I take the title?
Title can be held in several forms, including:
• Joint tenancy.
• Sole ownership.
• Trust ownership.
• Tenancy in common.
• Community property.
• LLC or entity ownership.
• Sole ownership.
• Trust ownership.
• Tenancy in common.
• Community property.
• LLC or entity ownership.
Each structure affects:
• Control.
• Liability.
• Tax exposure.
• Transferability.
• Inheritance rights.
• Liability.
• Tax exposure.
• Transferability.
• Inheritance rights.
Ownership structure should align with your legal and tax planning objectives, not default assumptions.
Consultation with a qualified attorney or tax professional is strongly recommended before selecting how the title will be held.
Q #2. Is it possible to use a spouse or partner’s income for loan qualification without placing them on the title?
Possibly. However, income qualification and title vesting are separate decisions.
Eligibility depends on:
• Income limits.
• Credit profile.
• County guidelines.
• Purchase price caps.
• Debt-to-income ratios.
• First-time buyer status.
• Credit profile.
• County guidelines.
• Purchase price caps.
• Debt-to-income ratios.
• First-time buyer status.
Qualification rules do not automatically dictate ownership structure.
These decisions should be evaluated before loan submission, not after approval.
Q #3. What ownership and title considerations apply in inherited property or family buyout situations?
If purchasing from family or buying out other heirs, multiple variables must be reviewed carefully:
• Tax basis implications.
• Title vesting structure.
• Proposition 19 eligibility.
• Gift of equity considerations.
• Fair market value versus agreed transfer price.
• Title vesting structure.
• Proposition 19 eligibility.
• Gift of equity considerations.
• Fair market value versus agreed transfer price.
Inherited property transactions are rarely simple sales. They involve layered financial, legal, and tax considerations that should be coordinated among professionals before finalizing terms.
Q #4. How does Proposition 19 affect inherited property?
Proposition 19 may impact:
• Eligibility deadlines.
• Parent-to-child transfers.
• Property tax reassessment.
• Ongoing occupancy conditions.
• Primary residence requirements.
• Parent-to-child transfers.
• Property tax reassessment.
• Ongoing occupancy conditions.
• Primary residence requirements.
Failure to meet specific criteria can permanently eliminate the ability to retain a favorable property tax basis.
Verification should occur before transferring title.
Q #5. How should property tax carryover be valued in a family buyout?
This is one of the most overlooked financial variables in inherited property negotiations.
If one heir acquires the property and qualifies to retain the existing property tax basis under Proposition 19, the retained tax advantage may represent substantial long-term financial value.
In this situation, the conversation is not limited to market value.
It may include:
• The projected annual property tax savings.
• The present value of that retained tax benefit.
• The cumulative savings over the anticipated holding period.
• The difference between the current assessed value and the current market value.
• How that benefit affects equitable buyout pricing among heirs.
• The present value of that retained tax benefit.
• The cumulative savings over the anticipated holding period.
• The difference between the current assessed value and the current market value.
• How that benefit affects equitable buyout pricing among heirs.
If one heir retains the favorable tax base while others receive cash distribution, that retained advantage can influence negotiation dynamics. In some cases, it may justify adjusting the buyout price to reflect the financial benefit being preserved.
This is not merely a pricing discussion.
It is a financial modeling exercise that should involve tax and legal guidance before agreements are finalized.
Families frequently overlook this factor and unintentionally leave significant long-term value unexamined.
Q #6. Is it better to put down more money?
There is no universal answer.
A higher down payment may:
• Reduce monthly obligation.
• Improve approval strength.
• Improve negotiating posture.
• Eliminate mortgage insurance.
• Improve approval strength.
• Improve negotiating posture.
• Eliminate mortgage insurance.
However, liquidity and opportunity cost must also be evaluated.
Retaining cash reserves may increase flexibility, reduce risk exposure, and preserve future options.
This decision should reflect your broader financial strategy, not emotion or habit.
Q #7. What matters more, the interest rate or the principal?
Both matter, but neither exists in isolation.
• The principal determines the size of the obligation and equity position.
• The interest rate affects borrowing cost over time.
• The interest rate affects borrowing cost over time.
The more strategic question is:
• How long do you expect to keep the property?
Length of ownership influences:
• Risk tolerance.
• Total interest paid.
• Break-even analysis.
• Liquidity exposure.
• Refinancing strategy.
• Total interest paid.
• Break-even analysis.
• Liquidity exposure.
• Refinancing strategy.
Focus on:
• Liquidity.
• Flexibility.
• Time horizon.
• Payment comfort.
• Flexibility.
• Time horizon.
• Payment comfort.
Rate is a component. Principal is a commitment.
Length of stay determines which lever matters most.
Length of stay determines which lever matters most.
Structure is the strategy.
Q #8. How often can I refinance?
There is no statutory limit. Refinancing depends on:
• Equity position.
• Credit profile.
• Market conditions.
• Loan seasoning requirements.
• Credit profile.
• Market conditions.
• Loan seasoning requirements.
Each refinance carries cost considerations. Frequency should be strategic, not reactive.
Q #9. Can I work with two lenders?
Yes. However:
• Switching lenders mid-transaction increases risk.
• Conflicting documentation can create delays.
• Multiple credit pulls may complicate underwriting review.
• Conflicting documentation can create delays.
• Multiple credit pulls may complicate underwriting review.
Clarity and consistency reduce friction.
Buyers are always free to work with the lender of their choice. Alignment and early review are what matter.
Q #10. Are there interest-only loans?
Yes, though qualification standards are typically stricter.
These products require careful evaluation of:
• Exit strategy.
• Risk tolerance.
• Long-term plans.
• Risk tolerance.
• Long-term plans.
They are tools, not shortcuts.
Q #11. Are there loans that allow renovation costs to be included?
Yes. Certain programs allow:
• Renovation loans rolled into principal.
• Construction-to-permanent structures.
• Purchase-plus-improvement financing.
• Construction-to-permanent structures.
• Purchase-plus-improvement financing.
These programs carry appraisal, contractor, and documentation requirements.
Planning must occur before the offer is written.
Q #12. Who informs me about Down Payment Assistance programs?
DPA programs are not automatically applied or offered.
They must be identified and evaluated early.
Typically, the loan officer determines eligibility based on:
• Income limits.
• Credit profile.
• County guidelines.
• Purchase price caps.
• First-time buyer status.
• Debt-to-income ratios.
• Credit profile.
• County guidelines.
• Purchase price caps.
• First-time buyer status.
• Debt-to-income ratios.
Many programs require:
• Specific timelines.
• Resale restrictions.
• Homebuyer education.
• Repayment triggers.
• Resale restrictions.
• Homebuyer education.
• Repayment triggers.
DPA is usually income-based rather than price-based. In higher-cost counties, purchase limits may extend into higher price ranges, including multi-million-dollar properties, if eligibility criteria are met.
Because DPA affects loan structure, qualification strength, and offer competitiveness, it must be reviewed before relying on it in competitive situations.
If your Realtor also holds a Mortgage Loan Originator license, that dual familiarity may allow earlier identification of program alignment and structural implications.
However, buyers are always free to choose their lender.
Q #13. What types of insurance should be reviewed?
At minimum:
• Title insurance.
• Homeowner’s insurance.
• Homeowner’s insurance.
Depending on the property type and location:
• Flood insurance.
• Earthquake coverage.
• Umbrella liability protection.
• Earthquake coverage.
• Umbrella liability protection.
Two important questions:
Does the replacement cost reflect current construction pricing rather than the purchase price?
Are exclusions or deductibles structured in a way that creates unnecessary exposure?
Insurance review should occur before closing, not after.
Q #14. What should I know about home warranties?
Home warranties are service contracts, not insurance policies.
Two key questions:
What is covered and what is excluded?
What is the claims process and service response time?
Coverage terms vary significantly.
Q #15. Are any transaction fees negotiable?
In some circumstances:
• Lender credits.
• Warranty providers.
• Commission structure.
• Service provider selection.
• Warranty providers.
• Commission structure.
• Service provider selection.
However, cost reduction should not compromise execution quality.
Value often outweighs discount.
Q #16. Who pays for inspections if the deal falls apart?
Inspection fees are typically paid directly by the buyer and are generally non-refundable.
They are due diligence expenses regardless of the outcome.
Q #17. Are there penalties for canceling escrow?
Consequences depend on:
• Notice requirements.
• Deposit protection provisions.
• Contract contingency timelines.
• Deposit protection provisions.
• Contract contingency timelines.
Failure to cancel within contingency periods may expose deposits.
Deadlines matter.
Q #18. Does the three-day cancellation rule apply to real estate transactions?
The commonly referenced “three-day right of rescission” generally applies to certain consumer credit transactions, not to standard residential purchase agreements.
Real estate contracts are governed by contingency timelines, not automatic cancellation windows.
You should not assume a three-day rescission right exists.
Q #19. What happens if a dispute arises during the transaction?
Most purchase agreements include structured dispute resolution provisions, including:
• Mandatory mediation.
• Optional arbitration.
• Defined notice procedures.
• Optional arbitration.
• Defined notice procedures.
Failure to follow mediation provisions may affect recovery of attorney’s fees.
Discipline in documentation prevents most disputes.
What is the scope of this page, and what are the professional boundaries?
This page provides general educational information only.
• It is not legal, tax, or accounting advice.
• I am not a CPA or attorney.
• I am not a CPA or attorney.
Title structure, estate planning, tax strategy, and contractual interpretation should be reviewed with licensed professionals.
If you are currently represented by another agent, that agent holds a fiduciary duty to advise you within the scope of your agreement.
Intervening in another agent’s active transaction is beyond professional boundaries.
When I represent a client, I take fiduciary responsibility seriously. That includes acting responsibly, identifying risks, raising concerns you may not see, and protecting your position throughout the transaction.
You are not simply a transaction.
What is the main takeaway from this page?
Complex questions rarely surface at the beginning.
They surface when timing is tight. Understanding structure before urgency allows you to move deliberately rather than reactively.
They surface when timing is tight. Understanding structure before urgency allows you to move deliberately rather than reactively.
This page exists so you can think clearly before decisions require speed.
If you are not currently represented and would like to discuss how these considerations apply to your situation, I encourage you to schedule a structured conversation.
Clarity early reduces correction later.
I am here to support you. Schedule a Conversation.