![]() Use this time wisely: The devil is often in the details, so if you see something that looks amiss, now is the time to ask your attorney or Realtor. The term is short for “closing disclosure,” a document the buyer is required to receive three days before close. “It summarizes the buyer’s loan in terms of the breakdown of their mortgage payment and all fees that the buyer will need to bring,” Ameer says. CDĬDs aren’t just ancient music formats for playing your Motörhead collection. It establishes that you can truly “take title” to the property as the legal owner, which is entered in public records. Note that there is separate title insurance to cover lenders and buyers, and you would do well to get a policy for yourself. As part of the process, the insurer will run a title search of public records, seeking loose ends such as liens against the property or fraudulent signatures on ownership documents. How do you know for sure that a home seller really owns the place free and clear-and that they can sell it without some long-lost heir coming out of the woodwork to stake a claim? Enter title insurance, which offers protection against any competing claims to the home. Once the buyers have removed all of their contingencies, they have to go through with the purchase or forfeit their EMD. Contingencies must be removed for the deal to go through. For instance, if the buyers placed a 10-day inspection contingency on the purchase, that means for that period they have a right to hire a home inspector to check the house top to bottom for any glaring flaws. Upon the 10th day, if nothing major is found, the buyers will be asked to remove this stipulation in writing. There are the valid justifications that enable buyers to walk away from the deal and take their EMD with them. But sometimes there are legitimate reasons to back out, which leads us to… Contingencies But if the buyer backs out for no good reason, the seller generally keeps the EMD as a consolation prize. So what happens to this deposit? If all goes smoothly, it will be put toward the buyer’s down payment and closing costs. Earnest money is one of the more debated and misunderstood aspects of the home-purchase process. That’s short for earnest money deposit-the funds buyers put down to prove to sellers that they’re making a serious offer (typically 3% to 5% of the cost of the house), proving they’re earnest about the deal, not just a tire-kicker. Let the pros explain the salient points of yours. There are many variations of escrow accounts, depending on the specifics of your deal. ![]() Once the sale is finalized, the escrow agent disburses the payments and documents accordingly. Think of this as a holding area for essential funds and important documents, maintained by an attorney or a representative from the title company (more on them below) as the details of the sale are ironed out. But what exactly is escrow, you ask? Read on. You might hear your lender or agent speaking to you about the COE, which stands for “close of escrow.” “They are simply discussing the date you will officially be the owner,” explains Rhonda Fee, a Realtor in Pleasanton, CA.
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