An interest in land is called real estate. The term interest the method by which a person deals with land. The person may own land, buy land sell land or lease land. All these terms show that the person has an interest in land. The transaction made to make the interest in land legal is called a real estate contract and once the contract is recorded in government records the person gets title to the land.
Real Estate Agents
Real estate transactions are terms used for buying or selling land or land with buildings called the property. Real estate transactions are performed by real estate agents. These agents represent the seller of the property or the buyer of the property. Some states have laws that allow real estate agents to represent both the seller and the buyer.
An escrow agent is a person who holds the funds and documents relating to a property until real estate transactions are completed. The purpose of employing and escrow agent is to safeguard the interests of the seller and purchaser. The escrow agent is a neutral party who keeps the seller’s documents and the purchaser’s funds in safe custody till the transaction is completed. Purchasers will make a purchase agreement and deposit a sum towards earnest money to show their genuine interest in closing the deal. If the purchaser backs out without good reason, the escrow agent will pay the money to the seller. If the seller backs out the earnest money will be paid to the purchaser.
Title is a record to show that the seller owns the property that is being sold. The title passes to the purchaser once the real estate deal is closed. The purchaser of the property should do a title search at a title office and get title insurance at first. This is to ensure that no claim is made on the property after the deal is closed. The seller may not reveal hidden title problems like unpaid taxes or details of a person with a right to the property like a legal heir.
Real Estate Attorneys
Though it is not necessary to take the help of a real estate attorney to close a real estate deal, it is wise to take the help of a real estate attorney. The attorney will be an expert at finding any legal hurdle in the property documents. The attorney will check the title and do a title search to ensure that there are no encumbrances or other problems with the title. There are many stages when to involve a real estate attorney. The title search stage, the property transfer stage, the contract review stage and the filing stage where the real estate deed needs to be filed at the county and state offices are stages when to involve a real estate attorney before closing a deal.
Purchasers should get a pre-approval for a mortgage. Showing that they are pre-approved will show the seller that the purchaser is financially strong and closing the deal will be quicker. Mortgage lenders will lock the rates of interest to be paid by the purchaser on the mortgage if the purchaser is pre-approved and they can pay at a fixed rate regardless of the fluctuations in the market.
Costs for Closing
Escrow companies charge fees for closing. It is important that the purchaser understands the exact costs involved in closing the deal. It is important that they negotiate with the escrow company nd make sure that no unnecessary fees are charged. Purchasers can also negotiate for a lower fees for many services of the escrow company.
Inspection of the Building
If the property to be purchased is a building or home, the purchaser should inspect the home after giving the seller notice. The purchaser can back out of the deal if the building has serious structural or other problems. The inspection of the building by the purchaser is a prudent step before closing a deal.
Inspection for Pests
The purchaser should get a specialist to inspect the property for pests. Normally mortgage companies expect a certificate from a specialist that a property is free of pest infestation.After Inspection
After the purchaser inspects the property and gets a pest inspection performed, the purchaser can negotiate the price with the seller again if the inspections reveal problems. If the purchaser l needs to spend money on repairs, the purchaser can ask for a reduction or back out of the deal. Some sellers agree to make the repairs before the deal is closed.
The purchaser should negotiate with the lender to get a reasonable interest rate and ask them to lock the interest rate. This will protect the purchaser from rate fluctuations. The purchaser can pay a fixed interest rate till the mortgage is paid in full.
Purchasers should set dates by which the seller should complete certain tasks. These tasks include disclosure of problems with the structure of the building and completion of repairs. The purchaser should also get a mortgage at an affordable interest rate within a certain date.
At this stage of the transaction the purchaser will deposit the entire purchase amount with the escrow agent. The purchaser will pay the closing costs. In some cases, the seller will pay the closing costs.
The purchaser should make a final inspection or walk through of the property. The purchaser should ensure that all repairs are completed by the seller and the seller has not taken away anything that was agreed to be sold to the purchaser.
Closing the deal
Closing the deal involves signing the papers. Purchasers need to be very careful at this stage. The documents will sometimes be more than 1000 pages. It is important the purchaser reads each page carefully to make sure that the interest rates are correct with no hidden charges. Finally, after documents are signed, the attorney will get the document recorded at the offices of the county and state recording offices.
Contact BRDM’s own Andrew Pardun for all of your real estate transaction. Having someone who knows the ins and outs of real estate law is beneficial to everyone involved, especially to you whether you are the buyers or the seller.