The Closing Process

The Closing Process

  What exactly is the closing process? What is involved? What goes on behind the scenes and how long does it take? Thanks to my personal closing attorney, Chad Pearman, P.C., we are breaking down the process and unlocking the mystery of the real estate closing. As with all of my process blogs (The Home Buying Process and The Home Selling Process), if you are not in the Nashville area, you will want to consult your local real estate professional and/or attorney to understand the practices in your area.   Whenever a property is bought, sold, or refinanced, there is a closing. Most times either a title company or a real estate attorney handles the process. The details vary for the title company depending on if you are buying or selling and the amount of time it takes on the day of closing to sign paperwork may too. The title company or attorney makes sure the contract is followed, that the correct party pays for the correct items, make sure the property is deeded in the correct name(s) in the correct way, and that all the fees are accounted for on the Settlement Statement. This outlines the general steps from the title company and, of course, there can be variables depending on the property or parties involved.   Receive sales contract from lender, Realtor, or Buyer.   Begin title search (takes 3-4 days). The title search verifies current ownership and reveals any current liens on the property such as mortgage, HELOC’s, property taxes, etc.   If/when there is a “problem” getting liens released, the title company will communicate with the appropriate parties to get the liens cleared and/or released.   Prepare title commitment for the title insurance approval based on various items. *Note: Next week I will explain title insurance and why you need it.   Request written payoffs for all mortgages. *Note: The payoff amount is not necessarily the loan balance or payoff amount in your monthly statement or on the automated message.   Insure taxes are prorated and split between Seller and Buyer.   Request Home Owner’s Association information such as transfer fees, assessments and dues. Prorate dues and charge proper party with any fees.   On closing day, insure all forms are signed by appropriate parties.   Place all monies (down payment, loan amount from lender or full purchase price and trust money) into the title company trust account.   Pay all parties from the trust account and make sure all liens are released (mortgage companies, HOA management company, pest inspector, contractors, real estate agents, taxes and other fees).   After closing, record deed and mortgage documents then issue title insurance policy. *Tip: DO NOT pay a 3rd party...

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The Home Buying Process

The Home Buying Process

  The home buying process can be like a maze. Just when you think you are done, there is a roadblock and you have to take another turn. The process can vary depending on where you live but this will give you a place to start. As always, please consult a professional real estate agent or Realtor (learn the difference here) in your area to learn what is customary in your market. Loan Pre-approval. If you don’t have a relationship with a lender, your Realtor can be a great resource. This is a crucial step prior to going to see properties for many reasons. You need to see how much you can afford. Sometimes there will be things that show up on your credit report that you don’t even know about. Lenders can help you get incorrect information taken off your credit report that may hinder your purchase ability. You may not even realize that you can’t purchase in the timeframe you wanted to. Unless you are paying cash, do not wait on this step. Your offer will be taken much more seriously when you find the perfect house if you have a letter from a lender that shows you are ready to buy!   Buyer consultation with Realtor. You may want to interview an agent or Realtor in your area (thiswill help). This is where you get to explain exactly what it is that you are looking for and give them your wish list. They should explain their process and how they personally work.   View homes. You have probably already looked at hundreds of houses online. Now is the time where your Realtor will be culling through properties that fit your criteria and will schedule a time to go see some. Be sure to give feedback on the ones you see so they know what you like and don’t like. This will help them learn your tastes and hone in on the perfect property for you.   Write offer. Once you think you have found “the one”, your agent will run comparables for you based on the area and the features of the property. Many factors go into coming up with an offer price: market, condition, days on market, etc. Make sure you discuss any contingencies you want or need in your offer (financing, inspection, appraisal, home sale, etc.) and any terms you may need written in (Seller pays title insurance, Seller pays closing costs, home warranty, etc.) Your agent will write up your offer for your signature and will negotiate on your behalf. In the Nashville area, you need to be prepared to write a trust money check which is kind of like a deposit. Once your...

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The Home Selling Process

The Home Selling Process

    Through the years as a Nashville Realtor, I have worked with people at various levels in their knowledge of the home selling process. One thing that rings true is that, unless you do it every day, you don’t know or understand it all. I will take you through an overview. Certainly there are nuances and each circumstance can cause the process to change a bit. Also, make sure you consult with your local Realtor because some of this may be different based on what state you live in. There are also details that I am leaving out in order to not put you to sleep so make sure to get all the information and trust the person you are working with.   Listing Consultation – If you are using a real estate agent or a Realtor (yes, they’re different – if you want to know how, read this), you will likely meet at their office or at the property they would like to sell. This is where you will discuss and sign the listing agreement with their company that outlines what they will do, what you will do, and how much you will pay them. You will discuss the comparable properties in your area, average days on the market, and the list price of your property.   Prepare Home for Market – If you haven’t done so yet, get to work on making your property sparkle and shine. First and foremost, make sure it is clean. Do necessary repairs, paint, clean carpets, pressure wash, landscaping, get a storage unit, etc. I have a list I give my clients that in a perfect world, all the items would be done. It’s good to have your Realtor give you suggestions as to what is necessary. You and/or your Realtor may also find it helpful to use the services of a professional stager. If you are living in the home, they can help decide what to pare down and how to arrange the furnishings to best showcase the home. If the property is vacant, it is sometimes advantageous to use a staging company that can provide furnishings and accessories to help buyers envision the home being lived in.   Professional Photography/Videography & Measuring – One thing that is a MUST HAVE in most markets is professional photos. It amazes me how many photos I see that actually hurt the sale of a home. Your Realtor should cover the cost and your job is to have the house looking like a model home before the photographer gets there. There are exceptions here as well. If the property is an investment property that is currently being rented, there may be no way...

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Heloc: What is it and How can I use it?

Heloc: What is it and How can I use it?

  Have you ever wondered what a HELOC is? Do you want to know how you can use it? I introduce you to Sidney Powers – banker extraordinaire. She will explain everything you would want to know so, read on.   Well here it is already… 2016 and a LEAP Year too!  The decorations are put away, the company has all gone home (hopefully) and you finally get to sit down. However, now you start looking around your house and begin to realize it is looking a little shabby (not as in Chic either). It looks Drab, Carpets and Furniture are worn, Kitchen and Bathrooms are outdated, and you would love to add on a Sunroom, your list is longer than the kid’s Santa gift lists were. You would love to remodel but that costs money.  Savings isn’t where you would like for such a project, as you have been busy paying the mortgage down. You don’t want to use your 401K or Investment money or the Children’s College funds… so you assume you will just have to put this dream off yet another year, UGH!! STOP, right there, it is possible you don’t have to wait another year!  You have lived in your house quite a while now and you have built equity into it; both by paying down the mortgage and by the rise in real estate values in Middle Tennessee.  Why not tap into that Equity and let your House work for you for a change?  Borrowing against the equity in your home is called a Home Equity Line of Credit, fondly referred to as a “Heloc”. Using a Heloc is a simple and economic way to make improvements to your home.  Just stop by or call your local banker (preferably me) for details about a Heloc; the amount you can borrow and how to pay it back, the interest rates and if there are any fees involved. You should also contact your Tax Preparer or CPA to see if the interest charged would be tax deductible. The beauty of a Heloc is it is not selective about what you use it for, the possibilities are simply endless.  One strong feature of a Heloc is the rates are very low and you have the probability of a tax deduction making this a very cost effective loan. This loan can also be an ideal way to buy an Automobile, use for College Education,  a Wedding,  a dream Vacation , to have as an Emergency Fund,  OR maybe,  to start your own Business. Other little known facts about a Heloc are; You can use it for a Home Renovation Loan to add on that Sunroom you wanted  -or-...

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