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BUYING A FOR SALE BY OWNER HOME |  |
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THE CLOSING PROCESS Title companies often play the role of settlement facilitator in a real estate transaction; in other words, they execute the instructions in the purchase contract between you and the seller. Besides holding your earnest money, the title company will make sure all the legal requirements are met, collect all monies related to the transaction, and distribute funds. As the buyer, you will be working on two fronts: • Getting your mortgage – your lender will undoubtedly have all sorts of paperwork for you to produce – prior years' W2 statements, pay stubs, etc. This is to document the claims you made when you applied for your loan. The more quickly you respond to your lender's requests, the sooner you can complete the transaction. You'll also need to arrange for hazard insurance and provide proof of insurance to the lender (and possibly to the title company). Meanwhile, the lender will order an appraisal of the home to make sure that its fair market value is at or above the amount of your loan. Your lender doesn't want collateral that is less valuable than your loan! During this process, you will receive a "good faith estimate" of what your closing costs will be. It will include a title search, title insurance, title company fees, recording fees, various office fees, broker's fees, and prepayment of interest to your first mortgage payment. You may also have to prepay some property taxes. Once everything is in place for your loan, your broker will schedule a "closing date" with the title company; that's the date your new home will be yours! • Inspecting the home –It is highly recommended that you have a certified home inspector go over the property in detail. The home inspector will examine every square foot of the property and prepare a report on the findings, detailing any potential problem areas. If the inspector finds problems, you will need to decide how to proceed. Do you want to ask the seller to make repairs? Do you want to handle the repairs yourself? How serious are the repairs? Are they problems that could be deal-breakers? Or are they just signs of wear and tear of an older home? This is where many deals fall apart. It helps to remember that, unless you are buying a brand new home, it's unlikely the home will be in perfect condition. Also, sellers are often disinclined to make repairs for others that they didn't make for themselves! On the other hand, you may not want to move into a house with a leaky roof or cracked foundation. The type and severity of the problem will be one indicator of how to proceed. Another is the type of market you are in. In a sellers market, where other buyers are easy to find, the seller will be less likely to want to make repairs. In a buyer's market, you will have more leverage. Meanwhile, the title company will be busy… • Conducting a title search to ensure that there are no claims against the property or past due taxes. • Preparing a title insurance policy for you and the seller to protect you both from future claims against the property. • Making sure that all disclosures have been completed. Once your loan receives final approval, the lender will send loan documents to the title company, which will oversee their signing. When you get a call that "documents are in," expect the process of signing them to take at least an hour. A representative from the title company office will explain each form in detail before you sign it, and give you a copy of all documents. At that time, the title company will also collect the rest of your down payment and closing costs. When documents are signed and all other requirements are met, you get the keys to your new home. Congratulations! Now, to move in! |
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All Site Content Copyright 2004 MichiganEhomes.com Terms and Conditions Privacy Policy