After you breathe a big sigh of relief or utter a shriek of terror that your offer has been accepted, you may think that your work is done at this point but think again. There are things that you need to do and review between now and your closing date. This is the point in your real estate experience where your real estate broker becomes your invaluable asset.
In general order of appearance, this is what you can expect:
Documents to Mortgage Company
You will deliver your fully-executed Purchase Agreement (signed and initialed in all the right places) to your Mortgage Loan Consultant.
Receipt of Seller’s Documents
You will receive documents from the Seller such as Seller’s Disclosure of the property and possibly some documents that pertain to Road Maintenance Agreements, Well Documents or Water Rights.
As part of your due diligence, you will need to order your home inspection. A home inspection is not required, but it is not only prudent, but it is highly recommended. This is probably the largest purchase you will ever make. So, spending a bit of money to have a qualified person thoroughly inspect your future home may prevent thousands of dollars of unexpected repairs later on. Your broker can give you contact information for several home inspectors in the area for you to call and interview. Make sure to agree on a price in advance with your home inspector. It is very beneficial and acceptable to be present on the day of your home inspection as you will learn a thing or two about your new home.
It is often very sensible to have your purchase agreement and other pertinent documents reviewed by your attorney. Although not required, having an attorney familiar with real estate law will save you peace of mind and possibly money should any legal issues come up.
The next step in the process is to order a title search on the property and the issuance of a Preliminary Title Binder (Report). The real estate broker for the seller will order this from the title company normally of the seller’s choice. This is where an attorney review can be valuable as to assure you that you will receive the property with a clear title.
Appraisal and Loan Processes
Your lender will order an appraisal of the property and begin processing the loan. Stay in close touch with your lender.
Review Home Inspection Report
Any adverse conditions revealed in this report, which may require mitigating and repairs will have to be negotiated with the seller in an “Objection, Waivers & Resolutions” document prepared by your broker.
As you resolve all your contingencies such as your home inspection, loan approval and title, you move closer to fulfilling the terms of your Purchase Agreement and home ownership.
After contingencies are removed, secure your homeowner’s insurance if you haven’t yet done so. Do some comparison shopping because the cost can vary widely among providers.
Your final walk-through is typically scheduled within the week leading up to the close of escrow and is your opportunity for one last look at the house. This is not the time to bring up new issues, but to ensure that the home is in the agreed-upon condition.
Once you have a pretty solid closing date, now is the time to make sure all the home’s utilities get transferred into your name on that date. If you are not familiar, your broker can provide the names and phone numbers of all the local utility companies. Here in Taos, it is Kit Carson Electric, New Mexico Gas Company (natural gas), Town of Taos (city utilities), Century Link (landline phones), Comcast Cable (where available), Dish Network, Excede Internet (satellite) and various propane providers of your choice.
Preliminary Settlement Statement
The Real Estate Settlement Procedures Act (RESPA) dictates that the parties to the transaction must receive the settlement statement (typically called the HUD) within 24 hours of closing. This statement is an itemized accounting of all charges imposed on both parties. These charges include the real estate broker’s fees, your earnest money deposit, appraisal fee, transfer taxes, loan payoff and more. The statement clearly outlines from whom the money is taken and to whom it is credited. Go over the HUD-1 with your attorney or real estate broker and check it carefully for errors.
Normally the Buyer and the Seller will “Close” separately at the title company. Your broker and your Mortgage Loan Consultant will typically attend as well. You should bring the following items to closing:
- Photo identification for each party to the purchase
- Homeowner’s insurance policy and proof of payment for it
- Certified check for all monies you are required to pay at the closing, unless you had a wire transfer.
Be prepared to sign more papers than you ever imagined it was possible to sign. When all is said and signed, however, you will be handed the keys to your new house. Welcome home to Taos!
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