The terms have been negotiated and the final offer has been accepted! What next?
Attorney
If you have not already found a Real Estate Attorney, now is the time to find one, and rather quickly. We suggest getting a reference and really doing your homework here. Your attorney plays a tremendous part in just how smoothly your closing will go. In this area of law, like every other, not all attorneys are created equal. The best personal injury or family law attorney most likely has no idea about title issues, bank costs and fees, zoning regulations and I would be willing be to bet can’t read a schedule “A” description or survey. Simply because Real Estate Transactional Law is typically non-adversarial does not mean that anyone is able to do it. The typical fee for representation in a typical residential real estate transaction can range from $1000.00 to $2,000.00 barring any extreme circumstances. Most attorneys fees for real estate transactions are a flat fee and not calculated on an hourly basis. Many people look at these fees and get a little sticker shock but put into perspective, this is normally less than one half of one percent of your purchase price. If the house you are purchasing is bank owned or a short sale, the fee is a little higher because of all the additional work that it entails, if the premises are sold for more than $1M then the fee is higher due to the additional liabilities.
An experienced Real Estate Attorney will have his/her fingers on the pulse of the Real Estate and Mortgage markets and will know if your mortgage is a “good deal” or if you are being taken for a ride. He/She will know the current available mortgage loans and the requirements to obtain those loans, the general interest rates for each type of loan, your estimated payments, and what reasonable fees are for the lender for each loan program. He/She will have relationships with mortgage lenders, title companies, appraisers, surveyors and the like to help get things done quickly and smoothly. Your Real Estate Attorney should be able to help you not only through the actual purchase of the property but also through the financing, post closing issues, tax exemptions and the like, knowledge that is gained through repeated closings and not generally available to the entire legal community. We generally advise purchasers, especially inexperienced purchasers to avoid using the attorney pushed on them by those people (brokers) involved in the transaction. There exists the possibility that the attorney, although representing you, may have loyalties to the broker as well as you.
Contract
The Seller’s attorney (in New York) will prepare the Contract Of Sale and forward it to your Attorney. You and your attorney will review the contract and make sure that the entire agreement you negotiated with the seller is contained in the contract itself. If there is a term of the deal that is not contained in the Contract of Sale, that term will no longer exist as the contract specifically states that it contains the entire bargain. Make sure the purchase price, down payment, and mortgage contingencies are correct. Make sure that the seller’s concession is correct, repairs to be done are listed, and adjustments or credits are listed or at a minimum referenced as many adjustments cannot be made until the date of closing is set.
Closing
On the prescribed date, you and your attorney, the seller and the seller’s attorney, the bank and their attorney and the title company will meet up. A host of documents will be set forth for you to sign. You attorney will review them with you, make sure the interest rate, term of the loan, and costs are accurate and are what you were told they would be. Read the loan application (known as a 1003) and make sure the information contained therein is correct including, occupation, monthly pay, yearly pay, liabilities, and the like. If you ever default and the 1003 is incorrect you could be accused of fraud. The moist importanf document, the Deed, will be executed by the seller placing you in title as the owner of the property. Make sure that your attorney explains to you all the different ways available to you to own the premises and the ramifications of each type of ownership.
After you have signed all the documents, the attorneys will divide up all that money. Most likely the money will be spent as follows, payoff seller’s mortgage, pay title company, pay attorneys, pay title closer, remainder to seller.
This is most likely the largest expenditure you will make in quite some time so enjoy it, it is not everyday you write a check for a few hundred thousand dollars. Once everyone is paid, the keys will be passed over, the title company will send the deed for recording at the County Clerk’s Office and you are the proud owner of a home, Congratulations!
Related Posts:
2. 7 Days To Owning A Home: Day 1 – Your Credit
3. 7 Days To Owning A Home: Day 2 – Financials
4. 7 Days To Owning A Home: Day 3 – Where To Live?
5. 7 Days To Owning A Home: Day 4 – Where Do I Find My Dream Home?
