If You Are a Home-Buyer, You Will Want to Know These Important Steps

It is important that all persons holding title (or those with an interest in the property even if not on title) execute your offer.

Once you and the seller agree on terms, in writing by signing the contract, you are “under contract”.  The date that occurs is called the Effective Date.   The most critical aspect of the contract process is to make certain you adhere to the critical dates in your contract.

Time sensitive.  See STEP 1.  Your lender should already have all of the information necessary to underwrite your loan.  You may need to update some of the information, such as recent pay stubs, however at this point your lender should only need the purchase and sale contract as well as the appraisal (STEP 11) and the title commitment from (STEP 12) in order to get your loan approved.

The interplay between the lender and the title company is critical.  The lender will usually request preliminary closing costs from the title company along with the title request.

Time sensitive.  You must complete your application for approval into the association (if applicable).  There may be multiple associations.

Roof, Plumbing, Electrical, AC, Termite, Pool, all should be inspected by a licensed home inspector.  It is also recommended – for large ticket items such as the roof – that you obtain two separate inspections from two independent roofing contractors.  In addition, a 4-point inspection should be requested for insurance purposes.

A determination of value.  Your lender will send an appraiser to the property to assess the “value” of the property. This is a critical step in your loan process.

The title due diligence is one of the most important aspects of purchasing your home.

Title Search – Recorded matters.
The title to your property is a history of ownership.  Any of the past owners could have judgments against them which could attach to the property.  In addition to mortgage liens, the property could have liens on it placed by contractors, associations and recorded code violations.  Title should be reviewed by an attorney.

Lien Search – Unrecorded matters.
A lien search provides us with information on any unrecorded matters such as unrecorded code violations, open permits or outstanding taxes.

Survey – The Boundary Analysis.
A survey provides us with an accurate legal description to your property as well as a determination as to whether there are any encroachments onto the property from neighboring properties or from the property onto neighboring properties. A survey should always be reviewed by an attorney.

Community Association Estoppels.
A form completed by the association indicating whether regular assessment dues are current and whether there are any special assessments owed or pending.

A buyer should shop for insurance well in advance of closing.  The insurance company will request a copy of the 4-point inspection as well as the elevation certificate which is provided by the surveyor.

Once the title commitment, lien search and survey are completed, the title company will send this information to all parties.  The seller will be required to satisfy the title commitment conditions (i.e., satisfy a mortgage at closing, provide an affidavit and provide a warranty deed).  All of the documents requested should be reviewed for accuracy.  It is important that an attorney review all of the documents – as once they are recorded – they are final.

Once the title commitment, lien search and survey are completed, the title company will send this information to all parties.  The seller will be required to satisfy the title commitment conditions (i.e., satisfy a mortgage at closing, provide an affidavit and provide a warranty deed).  All of the documents requested should be reviewed for accuracy.  It is important that an attorney review all of the documents – as once they are recorded – they are final.

At this point in the process, your inspection has long been completed and you have decided to proceed with the purchase of this property.

Your loan application as well as all financial document should have been in the hands of your lender for some time.  Appraisal should be complete and your lender should have asked you for any follow up information.  Any delay from you or your lender in this regard could jeopardize your ability to close on time and place your deposit and the closing at risk.

All association applications (if applicable) should be submitted and you should have received approval or know what date approval will be issued.

Your title company should have provided you with copies of the title commitment; lien / permit search as well as survey and association payoff statements and should have explained all aspects of each to you.

Assuming there are no title issues or there were title issues, but all have been resolved – and – all aspects of STEP 16 are complete, you are pending a “LOAN COMMITMENT” from your lender.  A loan commitment (or loan approval) is your lender’s agreement to lend – however a loan commitment could have a number of conditions.  What you are really waiting on is a “CLEAR TO CLOSE”.  This is your lender’s indication to you that you may close in the next several days.

 This is where the financial portion of the closing comes together.  The lender will provide their final figures to the title company and in return, the title company will provide the lender with a completed document with all sums due all parties.  This document is called a Closing Disclosure.

 This is where the financial portion of the closing comes together.  The lender will provide their final figures to the title company and in return, the title company will provide the lender with a completed document with all sums due all parties.  This document is called a Closing Disclosure.

Once the Closing Disclosure is approved by Lender, Buyer and Seller, a closing can be scheduled.

Once the Closing Disclosure is approved by Lender, Buyer and Seller, a closing can be scheduled.

The title company will provide you with an amount you need to wire into the title company account for closing.

The title company will provide you with an amount you need to wire into the title company account for closing.