To BuyChoosing A
Agent Time to
The Initial Agreement and Deposit
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. The Faulkner Team has a few important reminders:
- Written Records. Keep written records of everything. For the sake of clarity, it will be extremely useful to save 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.
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
Consult your 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 inspect the property within the time frame that was agreed upon in the effective contract to purchase. The Faulkner Team can recommend experienced inspectors that can evaluate any critical repairs needed for the property. You may also request a renegotiation of the terms of the contract.
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, and other factors. 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 the property 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 the application documents and processing fees are submitted to the appropriate person at the association by the required time. Your closing agent will request any required documents to be brought to the closing.
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 benefit from shopping around for insurance, by considering a higher deductible and by finding available discounts.