CLOSING THE DEAL

CLOSING ON A HOME

Making an offer is just the first step to buying a home, Coldwell Banker Welcome Home Realty will work with you every step of the way to be sure you are getting the best possible price and terms.

Negotiating

There are literally hundreds of points that you can negotiate in a real estate transaction, and it is important to feel confident about negotiating with potential sellers, or there may be a danger that a seller will talk you into agreeing to terms in a contract that are not in your best interest.

There are many potential points that can protect and enhance your purchase, including financing and home inspection contingencies. Most purchase contracts, even if they are standard documents, contain boilerplate language that may not fit your situation and may in fact be unfavorable to you. Your Coldwell Banker Welcome Home Realty Real Estate agents will explain the language, so that you can make an educated decision in order to make the best possible purchase decision.

Contingencies

There are two types of contingencies found in most transactions-a financing contingency, which makes the purchase conditional on the buyers' ability to obtain a loan from a lender, and an inspection contingency, which allows the buyers to have professionals inspect the property to determine potential property issues prior to entering a binding contract to purchase. You could forfeit your Earnest Money deposit under certain circumstances, such as by terminating a purchase without legal reasons provided for in the contract. In order to protect your position, your Coldwell Banker Welcome Home Realty sales associates see that the purchase contract contains provisions which protect your purchase interests, including a clear and marketable title, having the seller agree to maintain the property in its present condition until closing and making any agreed-upon repairs to the property.

Furnishings

Deciding what stays with the property is a negotiable item. If sellers want to take fixed items out of a house, they must specify so in the sales agreement. Appliances that are not built in such as washer, dryer, refrigerator, portable dishwasher, portable microwave, and freestanding stove are not automatically included in the real property, just as is anything else not permanently attached to the property.

Earnest Money Deposit

This is a deposit paid by the prospective buyer of real property as evidence of the good faith intention to complete the transaction. The amount can vary, depending on the value of the property, and it serves as a source of payment of damages to the seller if the buyer defaults. The amount of earnest money may also play into the negotiation strategy your Coldwell Banker Welcome Home Realty Real Estate agent employs. Once the offer is mutually accepted, the earnest money is held in trust by either the listing agent firm or the selling agent firm and is credited toward the buyer's purchase price at closing. If closing fails to occur, the defaulting party may lose any claim they have to the earnest money deposit.

Contract Preparation

The Contract of Sale otherwise known as the Purchase and Sale Agreement is a legal document which binds the buyer to a set purchase price and binds the seller to convey the title. The contract also services as the initial directions to the escrow company to begin processing the transaction.

Expenses and Closing Costs

Sellers customarily pay for the real estate commission, title insurance, the State transfer tax, one-half of the closing fee, some document preparation, and their portion of the year's taxes and assessments. Buyers customarily pay for 50% of the closing fee, their portion of the year's taxes and assessments, and their loan fees. Occasionally sellers and buyers decide to share the expenses of buying and selling. This must be negotiated during the purchase offer time and often depends on local real estate market conditions, other terms of the purchase contract, and timing considerations.

Some lenders will allow a credit from the seller to the buyer for a portion of the buyer's nonrecurring closing costs. But they usually won't allow a credit that reduces the amount of the buyer's down payment, or that includes any of the buyer's recurring closing costs, such as fire insurance premiums, interest on the buyer's new loan, property mortgage insurance and property taxes. Lenders' policies vary on how large a credit for nonrecurring costs will be allowed.

Closing Date

The closing date is the date stated in the contract. It is set in the original purchase agreement by agreement between the buyer and seller. It is always nice to set a closing date that leaves you enough time to prepare to move in, and which doesn't cost you unnecessary money. The date of closing can affect your closing costs (make sure to ask your lender for a good faith estimate).

Occupancy Date

Many times the seller will request to remain in the property after closing, in part to assure that closing actually occurs without the seller having moved from the property. If that is the case, the seller actually becomes the tenant of the buyer after closing, so proper documentation is needed.

Insurance

Now that you've found a home to purchase, you want to protect your investment with insurance. Most buyers get a comprehensive homeowner's insurance policy, which provides coverage for fire damage, water damage, personal liability, vandalism, theft, loss of use of the house, and many other coverages, including personal property and furniture. If you are financing your home purchase, your lender will require you to buy at least basic hazard insurance. Be sure to talk to your insurance representative fully about insurance options.