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The Process, Step-by-Step
The Initial Agreement and Deposit.
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller.
Some important tips to keep in mind to streamline the process:
- Once a property is chosen, it’s time to make an offer. We will assist in making recommendations and explaining your options for the offer.
- Negotiations can be quick and easy, or go back and forth between you and the seller several times. Our negotiation experience and education will help you understand your options.
- Keep written records of everything. We will assist you in accurately drafting all the paperwork for your purchase and make sure that you have copies of everything.
- Stick to the schedule. Now that you are under contract, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. 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 constantly updated, so you will always be prepared for the next step.
The Closing Agent.
Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the earnest money in escrow and issue a preliminary title report. Title reports will list any encumbrances, restrictions which limit various activities such as building, easements, encroachments, liens, mortgages, etc. The title officer will be able to help with any concerns or questions. The escrow agent uses the purchase and sale agreement as instructions and will make sure that all the terms of the purchase and sale agreement are satisfied. The escrow agent will also prepare the final documents for signing and disburse funds. The escrow company will also record the deed and any other documents that should be recorded.
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 have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. We can recommend several different inspectors.
Depending on the outcome of these inspections, one these things may happen:
- The inspections are accepted and the buyer and seller proceed to closing
- The buyer terminates the sale based on the findings of the inspections
- The buyer requests some repairs to be completed prior to closing. Seller is not obligated to perform any repairs but may choose to do none, all or some of the repairs.
Appraisal and Lending.
If your purchase is contingent upon financing, it is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. 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 secure. Continually check with your lender to be sure the loan is proceeding timely, going through smoothly and will fundon time.
If the property that you are purchasing is conditioned upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all of the information completely and legibly so there is no delay in processing the application. If you are required to meet with the association for your approval, make an appointment as soon as possible for the interview. Most associations require a certificate of approval before move-in. Your closing agent will request that the original copy of this approval letter be brought to the closing, so that it can be recorded with the deed in the county public records.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of 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.
- Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
We will be happy to recommend experienced knowledgeable insurance agents for every property type.