Buyers Roadmap
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:
- 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 and to convert
them into written agreements to be signed by both parties. We will
assist you in drafting all the paperwork for your purchase and make
sure that you have copies of everything.
- Stick to the schedule. Now
that you have chosen your offer, 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 deposit in escrow and will research the
complete recorded history of the property to ensure that the title is
free and clear of encumbrances by the date of closing and 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.
Inspections. Once
your offer is accepted by the seller, you will need to have a licensed
property inspector inspect the property within the timeframe 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 of two things may happen:
- Either
each milestone is successfully closed and the contingencies will be
removed, bringing you one step closer to the close, or
- The
buyer, after reviewing the property and the papers, requests a
renegotiation of the terms of contract (usually the price).
Appraisal and Lending. 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. If the agreement is
conditional upon financing, then the property will be appraised by a
licensed appraiser to determine the value for the lending institution,
via a third party. 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
sales 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.
Association Approval. If
the property that you are purchasing is conditional 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.
Property Insurance. 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.
