Here’s one piece of advice about buying property in the current market climate (February 2019):
Don’t 👏sleep 👏 on 👏 that 👏 listing!
You may think that because winter is traditionally slower you won’t face a competitive offer situation or log in one day to see the home you’ve been watching is suddenly pending. You are wrong. It’s happened to a couple of my buyers since the first of the year and it’s hard to recover from.
It’s true that conducting your home search during the winter months can give you an advantage. That’s why savvy home-buyers who know what they want and how they’ll get it are actively shopping during this time. If you find a property in your price range that hits all your major needs, put an offer on that place ASAP. If you need a week or longer to think about it, you’re probably going to lose it. If you’re going to shop on Zillow without a plan, prepare to be heartbroken.
💔 💔 💔
You can avoid losing to other buyers by having a clear and concise understanding of your property needs and buying ability. Before you look at property, get pre-approved, not just pre-qualified, so you can act quickly with a strong offer when you find the one. Use an agent with energy who has good communication and negotiating skills.
You can prepare yourself for the fast-paced process of purchasing property by reading ahead. I prepared this article/handout for my clients and customers: We’re Under Contract, Now What? To figure out what you really need and want out of a home, fill out my Buyer Preference Worksheet.
REALTORSⓇ are governed by a strong code of ethics that respects and protects clients and customers as well as other real estate agents. We must maintain memberships in the local, state, and national REALTORⓇ Associations. Many of us are active members of the community and spend time volunteering, which allows us to better understand the market where we work.
The REALTORⓇ pledge:
I AM A REALTOR®
I Pledge Myself
To strive to be honorable and to abide by the Golden Rule;
To strive to serve well my community, and through it, my country;
To abide by the REALTORS’® Code of Ethics and to strive to conform my conduct to its aspirational ideals;
To act honestly in all real estate dealings;
To protect the individual right of real estate ownership and to widen the opportunity to enjoy it;
To seek better to represent my clients by building my knowledge and competence.
Buying a home is a complex process. If you’ve never purchased real estate, you probably don’t know what to expect. This is why it’s a very good idea to use a buyer agent — preferably a REALTOR® (yes, there is a difference!).
The transaction process step-by-step.
Offer Accepted! You did it! You found a home you love and you’ve reached an agreement with the seller. Once the Purchase and Sale (P&S) contract is signed and dated by both parties and both parties are made aware of this, the contract gets an effective date. This is the date that starts the clock on your EMD and inspection period deadlines.
Earnest Money If you have promised an earnest money deposit (EMD), you’ll need to get your check to the agency holding the EMD in their trust account by the deadline. By not doing so, you risk the contract being terminated by the seller.
Submit P&S to Lender If you’re financing this purchase with the help of a lender, it’s time to really get to work on your loan. As soon as there is a fully executed P&S, your agent will submit it to the bank or mortgage company and you’ll start checking off the conditions of your financing. Some lenders and loan programs won’t provide a pre-qualification or pre-approval; they’ll want to see a completed P&S before you can start the application process.
Inspection Period Once the contract has an effective date, the clock starts ticking on your inspection period. Also called an investigation period, this is one of the contingency clauses in a P&S contract. Your inspection period is the amount of time you and the seller agree you will have to conduct a variety of investigations of the property. It is absolutely recommended that you hire a trusted professional to inspect the premises. The resulting home inspection report is your property and you decide who is allowed access to the information.
Title & Closing Initiation It’s a good idea to reach out to a title/closing company as soon as possible so they can begin to research the property’s title. This allows time enough to find and address any possible clouds on the title.Most title companies will not charge you for title research until the transaction gets to the closing table.
Inspection Addenda If you found an issue with the home during your inspection period and a solution was negotiated, an addendum will be added to the contract. If the issue is serious enough to affect financing, there won’t be a clear-to-close until it is taken care of. Repairs should be completed before the appraiser comes so that they see the home in its best condition and they won’t need to come back to verify that a repair has been made, which costs you extra money.
Appraisal Your lender will order the appraisal for you. While an inspector looks at the structural integrity and safety of the home for you, an appraiser examines the home and compares it to recent sales in the area to verify its value for the bank. A federally-backed loan will need to pass certain safety guidelines. The appraisal report will come back to the lender. The appraiser will either find that there is sufficient value in the property to support the loan amount, or the price or structure of the financing will need to be renegotiated.
Clear to Close Once the appraisal has been conducted, all contingencies in the contract are completed, and conditions of financing are met, your lender will announce that the loan is “clear to close.” A closing date will be set, and you’ll be on your way to the closing table! TILA-RESPA consumer protection laws dictate that borrowers must receive closing disclosures a full three days before they are allowed to close on the loan. If you’re closing on a Friday, you’ll need to see these on Tuesday.
Closing Table 24 hours before closing, you’ll get a settlement statement with the final total for taxes, prorations, your down payment and loan origination fees, seller concessions, and title search costs. Review this carefully and make sure you ask your agent or title company if you question anything. At the closing table, the title agent will verify your identity with a picture ID. Your EMD will be brought from the trust and applied to your closing costs as a credit. You will bring a certified bank check for the amount due from you. It is always a good idea to bring an extra personal check with you to closing, in case there are any minor last minute adjustments. You will sign mortgage docs, your deed, and other legal documents. Finally, you’ll get the keys to your new home.
I created this graphic of the process to give my buyers an understanding of the timeline from contract to closing. Download it for free here:We’re Under Contract Now What?
The question I hear most from my clients is, “Is this normal?”
In real estate, there is no normal. No two properties are exactly alike. No two property transactions are exactly alike. As your real estate agent, I’m the best resource you have in your home-buying journey. This may be your first or second home purchase, but I’ve guided countless transactions to closing. I have the training and experience to think creatively in tough situations, and I have many contacts throughout the real estate world to call on for help when the going gets tough (or weird).
Buying or selling a home can be an emotional process. Having an objective representative to negotiate and relay information can be crucial to keeping a deal together. I’m your coach, planner, and fixer from start to finish, and I’m there for you even after you have the keys to your new home in hand. The best part? You don’t pay me a dime.
How Can I Work for Free?
I choose not to charge my buyer clients a fee to retain my services. That means you get the benefits of having an agent solely devoted to your needs and interests and it doesn’t cost you a thing. But I don’t work for free. My fee is paid by the listing agency at the closing table. Why?
Here’s some insight into buyer and seller representation: A seller’s agent is the listing agent, and a buyer’s agent is the selling agent. A listing agent is paid to market the home, and they pay me, the selling agent, when I match the property with a buyer. I’m technically selling the home and that’s how I get paid.
If you want to help other first-time homebuyers by sharing wisdom about the process, you can download a print-quality PDF of this article here: Why You Need Buyer Representation
So you’re buying or selling a piece of property and it’s time to choose a closing attorney. The closing attorney helps ensure a smooth transaction by researching the title and preparing the deed.
But wait, what’s the difference between a title and a deed? Aren’t they the same thing? And why research? How long does this take? What does it cost? And can anything go wrong?
I’ve called in Lexi Scott, Account Executive at Gateway Title to help answer these questions. But before we delve into the ins and outs of deed prep and title research with Lexi, let’s quickly look at the difference between a title and a deed.
A title is the “bundle of rights” or “sticks” that comes with owning real estate. It may seem odd, but we use the “bundle” metaphor because these property rights are not all in full effect all of the time for every piece of property. Sticks are removed from the bundle when there is an encumbrance on the property, such as a lien or restriction, or when the property owner gives up subsurface (minerals, oil) or air rights.
A deed, quite simply, is the written proclamation of your rights to a property. I’ll talk more about deed types and the rights they describe in future posts.
Now let’s talk to Lexi about the importance of researching a title and what goes into preparing a deed.
Lexi, what can title research uncover? How long does it take?
A title search is performed to identify the property, establish ownership, and determine any title issues or outstanding liens. Property records are gathered from the registry of deeds and then thoroughly analyzed by our title examiner. This process can take anywhere from a few days to a couple weeks, depending on the turnover time at the registry. A title search is a vital part of the buying process. A clouded title could present serious issues for the buyer in the future if not uncovered & resolved.
What is a cloud on a title? How can it be resolved?
A cloud (a.k.a. a title issue) is an obstacle that may impact the sale or insurability of title on a property. Some very common issues include: undischarged prior liens or mortgages, ownership irregularities, or faulty foreclosure proceedings. If a property has a title issue, be aware that it may impact the closing date. Some issues extend closings weeks or months if the matter is complicated. If the seller has title insurance, it can certainly expedite the curative process.
The steps to resolution vary depending on the matter at hand. When Market Street discovers a title issue, it is immediately communicated in writing. Steps to “cure” the issue are clearly outlined in an accompanying letter. One the issue is resolved, title is considered clear.
What does all of this cost?
The cost varies depending on the nature of the transaction. Our free mobile app Liberty TitleAgent One [iOS/Android] provides a prompt, easy way to estimate total title closing costs, title insurance, transfer tax, etc. Simply fill in the basic transaction information and it instantly generates a quote.
Are there ever times issues can’t be resolved?
Sometimes title issues require a lengthy and/or expensive legal process to clear. This can be very time consuming, especially when the seller does not have title insurance. In some situations, “exceptions” to the title policy can be made and the transaction can be cleared to close.
When does a deed get prepared? What goes into that?
Once the property description (also referred to as the Exhibit A) is verified, the deed is prepared. The deed identifies the seller’s claim to the subject property and conveys ownership to the buyer. This document is signed by the seller at closing and is recorded at the registry of deeds. The original copy of the deed is returned to the buyer after recording. It is very important for all parties to thoroughly review the legal description to confirm & accept the property being conveyed.
Connecting you with a title company that suits your needs is a courtesy provided by me, your real estate agent. Do you have a question about titles or other real estate related matters? Let’s talk!