|
|
Once you have secured your financing, found the perfect house, and made an offer that has been accepted, you are ready to close on the deal. The seller's agent will now draw up an offer to purchase that includes an estimated closing date (usually 45 to 60 days from acceptance of the offer). At this point, you also typically need to make a good-faith deposit -- usually one percent to ten percent of the purchase price -- that should be deposited by your lawyer into an escrow account. The seller will receive this money after the deal has closed. If the deal falls through, you will get the money back only if you or the home failed any of the contingency clauses.
There are a few key points to remember that can make closing more efficient for both you and the seller. - Get the property inspected.
- Have a real estate attorney look over your contracts.
- Negotiate closing costs.
Let's take a look at each.
Inspection
As we have mentioned, it is crucial that you have your home inspected by a reputable inspector before you close. Inspectors are trained to go over properties, looking for possible sources of trouble like outdated electrical, plumbing, or heating systems. These potentially can require costly repairs once you have moved in - it's important to know about them early and factor them into the total cost of the home.
The Web is a good source of information on how to find inspectors, how to evaluate them, and how they conduct their investigations. Both the American Society of Home Inspectors (www.ashi.com) and the Home Inspection Super Site (www.inspectamerica.com) are good places to start.
Real estate attorneys
Regardless of the type of deal you are making, it is important to have a real estate attorney have a look at your paperwork before you close. This is an important contract -- you want to make sure there are no mistakes, omissions, or costly details that you have overlooked.
Negotiate closing costs
Closing costs can total up to seven percent of the loan. They are often negotiable though, so be sure to look over your final settlement sheet for any questionable fees and ask for an explanation of each. Your attorney will be able to help you negotiate any such fees. Here are some common ones to look out for: - Bank attorney fees. Banks have attorneys do title searches and draw up the agreement between the buyer and seller. These fees can range from $250 to $1,000. If you suspect they are high, ask for an accountant to justify the total. Lenders say attorneys fees shouldn't exceed $500, unless yours is a highly complicated transaction.
- Documentation preparation fees. These fees are simply for clerical work, but since most documents are now prepared on the computer it is more than reasonable to ask for a waiver.
- Processing fees. This is a paper-handling charge. Get it waived and you will typically save up to $150.
- Appraisal review fees. If your lender suspects that the estimated value of your property is inaccurate they may ask for a second opinion. If you can prove the value of the property yourself, try to do so and you may get this fee waived.
- Notary fees. Many lenders have a notary working in their office. If so, ask for a waiver or a reduced charge.
- POC. "Paid outside closing" represents a broker's commission for getting you to agree to a higher rate. If you see the letters "POC," that typically signals an unfair deal. To make sure you are getting the fair market rate, request a copy of the daily rate sheet on the day you lock in the terms of your loan. Those numbers should match the figure you were given.
- Credit report charge. You will be charged for a credit report. A credit report generally costs less than $10 to obtain, yet many lenders will charge $40 to $60 dollars. If you complain, many banks may just charge you their $10 cost.
- Courier fees. State up front you don't want to pay $50 courier fees or overnight delivery charges. Have paperwork sent by regular mail or pick it up yourself instead.
- Underwriting fees. This is a charge for processing your application and verifying the property value. It typically runs from $150-$300, but is usually negotiable.
|
Qualifying for a mortgage