How binding is a real estate contract?
Once a buyer delivers to a seller a signed purchase and sales agreement along with the initial deposit, and the seller signs that agreement, the document becomes a legal contract and is binding on both parties. Therefore, it is imperative that you read it carefully, and understand all of the terms of the contract before you sign it. It’s never a bad idea to add language to the contract that it is subject to the parties’ respective attorney’s review within forty eight (48) hours.
What are the important terms of a real estate contract?
While contracts may include many unique terms and conditions, some terms are imperative. They are:
*There is also a statutory contingency associated with the sale of condominiums. While this contingency is not printed in all contracts, it is granted automatically via state statute.
When can my attorney schedule the closing?
A closing cannot be scheduled until the lender declares it “Clear to Close” (i.e. all pre-closing conditions are satisfied). In a cash deal closing, where buyer is not applying for a loan to help finance the property, the buyer’s attorney will schedule the closing based on the contract date and whether all physical inspection items have been completed.
When can I schedule my movers?
Movers should not be scheduled until clients have confirmed the date of closing with their respective attorneys. Anyone contracting with a mover should inquire about the company policy in the event the moving date gets extended for any reason.
When will I find out how much money I will need to close?
Final closing figures are calculated as soon as the lender provides instructions and figures. Often, lenders do not provide figures until the day prior to or the day of closing.
When will I find out how much money I will net after closing?
Final closing figures are calculated as soon as the lender provides instructions and figures, and seller’s and buyer’s attorney confirm adjustments. Often, this does not occur until the day of closing, but in some instances it occurs the day before.
How do I know that the house will be left in the same condition it was in when I first saw it?
If you are a buyer, you want to be sure that the house is in substantially the same condition it was in when you initially looked at it. Right before closing, you will need to schedule a final walk through with your realtor. The purpose of the final walk through is to ascertain whether the seller completed the required repairs, if any, and to confirm that the property was left in “broom clean” condition. All major appliances such as heat, air conditioners, the refrigerator and the like should be examined to assure they are in working condition.
Can I bring a personal check to closing?
Only a bank check or certified check is permitted at closing. However, if you prefer, a wire transfer may be made directly to the firm’s client fund account prior to closing.
What is a Deed to property?
A deed is a legal document that transfers a right to property in real estate. There are different types of Deeds.
A Warranty Deed transfers ownership and promises that the transferor has good title. A property has good title if it is free from liens and claims of ownership.
Property can also be transferred by Quit Claim Deed. A Quit Claim Deed transfers whatever ownership rights that the transferor has in the property.
What are the different ways to hold title with another person?
It is important to consider how you wish to hold title, as it affects what will happen to the property upon death. The two most common ways to hold title are in Survivorship or in Tenants in Common. When you hold title in Survivorship, it means you are joint tenants in equal shares. Your share will automatically pass to the co-owner upon your death.
If you opt for holding property in Tenants in Common, you can take an unequal share of the property and you have the right to designate to whom your property passes upon your death. In this case, your share in the property upon your death is distributed to the named beneficiary designated in your will.
Some states recognize property owned as Tenants by the entirety, often referred to as community property. This type of deed provides that each spouse owns the whole property and is not at liberty to transfer his or her right to the whole property unless the other owner consents.
Title Insurance is purchased at the time of closing. It protects against defects in title or ownership caused by the following:
The title insurance carrier is only obligated to pay the loss caused by the defect in title up to the total amount purchased, subject to the terms of the policy.
While your mortgage company will require you to purchase a lender’s policy protecting the total amount of the mortgage, an owner’s policy that protects your interest, is optional. Title insurance is unique in that the original premium paid when the house is purchased, is the only premium. It is cheaper to purchase the owner’s policy at the time of closing, as you will save the cost of a future title search. The additional cost of an owner’s policy is nominal (it often does not exceed a few hundred dollars more than the cost of the lender’s policy). I require all clients who choose not to purchase an owner’s title insurance policy at the time of closing, to sign a waiver that acknowledges that they were offered the policy, but declined it.
Title companies also offer title plus policies that include coverage for municipal violations, boundary line issues and other ownership concerns.
What is the difference between a pre-qualification and a pre-approval?
The first step in the mortgage process is getting pre-qualified. A borrower gives the lender his/her overall financial status, including one’s debt, income and assets. After evaluating your financial picture, a lender tells you an approximate amount for which you qualify. A pre-qualification can be done over the phone or on the internet, and there is usually no cost. The key distinction between a loan approval and an loan qualification is that the pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.
In order to get pre-approved for a mortgage, you need to complete a mortgage application and give the lender permission to order your credit score. This is a much more involved process than pre-qualification. After analyzing the application information and your credit score, the lender should be able to tell you a specific mortgage amount for which you will qualify. In addition, the lender should be able to tell you roughly what rate you qualify for. This information will enable you to select a home in your price range. The result of a pre-approval, is that when dealing with a seller, the seller will know you are a strong buyer to be taken seriously.
The last step in the loan process is obtaining a “commitment.” A commitment is a promise by the lender to loan you a certain amount of money at a specific interest rate. A commitment is only given once the home for which you have contracted is appraised and is valued at or above the sales price.