The Initial Agreement and Deposit:
A contractual agreement is a legal arrangement between a potential purchaser and the property’s seller. A few important tips to keep in mind are listed below.
- Keep written records of everything: For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including Counter Offers and Addendums. You should always convert them into written agreements to be signed by both parties. We will assist you in drafting all of the paperwork for your purchase.
- Stick to the schedule: Now that you have an accepted offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate transaction. Meeting the requirements on time ensures a smoother flow of negotiations, so that each party involved is not in breach of their agreements. During the process we will keep you updated so that you will be prepared for the next step.
The Closing Agent:
In most cases, either a title company or an attorney will be selected as the Closing Agent. The Closing Agent should research the complete recorded history of the property to ensure that the title is free and clear of encumbrances, before the agreed upon closing date closing. They should also make sure that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title:
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal estate and tax implications especially when selling, or upon death of the title holder.
Once your offer is accepted by the seller, you will need to have a licensed property inspector thoroughly inspect the property within the time frame that was agreed upon in the executed contract to purchase. If you wish to obtain professional opinions from inspectors who specialize in a specific area (e.g. roof, HVAC, structure etc.), you may elect to have different inspectors inspect the property.
Appraisal and Lending:
It is imperative that you keep in close communication with your Lender. Your Lender should let you know when additional documents are needed to approve your Loan Application and fund your loan. If the agreement is contingent upon financing, then the property will be appraised by a licensed Appraiser to determine the value for the lending institution. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties based on a combination of square footage measurements, building costs, recent sale of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your Lender to be sure the loan will go through smoothly and on time.
If you are obtaining a loan, you will be required by your Lender to purchase a certain amount of insurance for the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
- Consider a higher deductible.
Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discounts.
You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters, or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
Make sure you speak with your insurance agent about sink hole, earthquake, and flood insurance. We will be happy to recommend experienced and knowledgeable insurance agents for every property type.