Our Buying Process
You’ve found the home you can see yourself living in, now what? We will ensure each step in the process is simple and understandable.
STEP ONE : Consult with your Realtor
Home buyers overwhelmingly elect to have a Realtor ® represent their interests in the home buying process. The National Association of REALTORS® has shown that when a Buyer’s Representative was used, the prospective Buyer found a home an average of one month faster and gained information and access to a minimum of eight more properties than those consumers who did not use a Buyer’s Representative.
My clients choose me as their buyer representative because:
- They want the benefit of my advice and judgment at every step of the transaction.
- They want a professional advocate representing their interests and not the interests of the other party.
- They want their personal business kept confidential from all other parties to the transaction.
- They want strategies on pricing, writing offers, negotiation, repairs and contingencies.
- They want to get the home they want, at the best possible price, in the least amount of time possible.
To Represent You in the Best Manner Possible, a Buyer Agent Should:
- Have a thorough working knowledge of the mechanics of the real estate business.
- Have solid knowledge of the real estate market and local neighborhoods.
- Be a strong negotiator.
- Be accessible.
- Be able to anticipate pitfalls.
- Have exceptional problem-solving abilities.
- Have the ability and desire to work effectively and efficiently.
- Have solid communication skills paired with the ability to work well with cooperating agents.
- Pay close attention to detail, be well organized and carefully follow through.
- Exhibit a high level of client service.
- Demonstrate commitment to advancing their real estate education through education and volume-based designations.
- Be trustworthy and committed to working for your best interests only.
STEP TWO : Research and arrange your financing and insurance
THE LOAN PRE-APPROVAL LETTER
A written pre-approval letter from a mortgage lender provides you with the leverage you need to obtain the very best price and terms. In a competitive situation, you gain an advantage with a strong pre-approval letter.
Pre-Approval is Different from Pre-Qualification. Pre-Approval means that you have made written loan application with documentation and it has been approved by the lender. Pre-Qualification means only that a conversation about your qualifications with the lender has taken place but nothing has been verified and no commitment has been made by the lender.
The Benefits of a Pre- approval Letter:
- You gain significant advantages in negotiating by being prepared where other buyers may not be
- You prove to the seller that you are a very serious buyer who is ready to act
- You eliminate wasted time, frustration and stress
- You are pre-approved for your loan in advance — all “verifications” and contingencies are removed except for the appraisal and contract
- All you need to do is find the home you want and write an offer
- You know what your monthly payment will be
- You know how much cash you need to purchase your future home
Important to keep in mind: What you are qualified to pay versus what you are comfortable paying for a monthly mortgage payment may be two different numbers. You can often be approved for a much larger monthly payment than what you will actually be comfortable paying each month- this is something to discuss with your lender or your Realtor.
Requirements for Pre-Approval
There are several documents that may be required by the lender in order to issue a commitment or pre-approval letter.
- Employment – Name, address and phone numbers for employer(s).
Pay Stub – Most recent.
- Previous Employment – If you have been with your present employer for less than two years, need name, address, phone numbers.
- Other Income – Such as alimony, child support, disability, VA benefits, Social Security benefits, rental income. Evidence of receipt must be supplied.
- Authorization to Obtain Credit Report
- Current Mortgages – Name, address, account numbers, monthly payments and balances, including any recently paid-out accounts. If the property is to be rented or sold, provide lease or sales agreement.
- Charge Accounts – Name, account numbers, and balances.
- Other Loan Accounts – Personal, student loans, any installment type loan. Provide the name, address, account numbers, payments and balances.
- Auto Loans – Name, address, account numbers, monthly payments, balances.
- Other Liabilities – Alimony, child support, student loans, monthly payments.
- Self-Employment or Part Owner of a Company – Year-to-date profit and loss statement, complete personal and business tax returns and 1099’s for the past two years. Ownership is defined as 25% or more shares of stock in the company.
- Tax Returns – Needed for the past two years if overtime, commission, bonus or tip income is to be used for qualification purposes.
This list may look daunting at first glance, but many of these items are easily available with a quick trip to your lending institution and a look over your old tax forms. Your lender will help walk you through the document collection process.
Lender’s Commitment Letter
When your full loan application and documentation has been reviewed by the lender’s underwriter and approved, you will receive a commitment letter. Conditions for funding the loan after this lender commitment is made typically include:
- Title Search
INFORMATION FOR LOAN APPLICATION
Formal Loan Application:
- Contract for Sale – Ratified and with all addenda, a copy of the deposit check, a copy of the listing property data sheet.
- W-2 Forms – For the past two years.
- Checking and Savings Account – Name, address, account numbers and balances (provide at least 3 months of statements).
- Other Assets – Stocks, bonds, cash value of life insurance, vested interest in retirement plan, household and personal effects (approximate value).
- Landlord Information – If presently renting, name and address.
- Photo ID – Copy of your driver’s license is sufficient.
- VA Applicants – Certificate of Eligibility, DD-214 or Statement of Service, name, address, phone number of closest living relative.
ADDITIONAL BUYER’S COSTS
In addition to the amount of the loan, these are some costs that you should expect to pay.
Prior to closing
- Earnest Money: approximately 1% of the purchase price
- Home Inspection
- Survey (this cost is does not pertain to all home purchases)
- Down payment
- Lender fees
- HOA dues
- Home owners insurance
- Recording fees
*Some of these expenses might be negotiated to be paid by the seller at closing*
OBTAINING HOME-OWNERS INSURANCE
Obtaining hazard/homeowner’s insurance used to take a matter of minutes- now it can take days or even weeks. Insurance underwriters not only look at the claims history of the current homeowner and specific property; it is highly likely that they will also be evaluating your own claims history as well. Therefore, it is critically important to initiate the process of getting hazard insurance before we have even identified the home you wish to purchase. Getting started on this process is as important as getting your mortgage.
I strongly recommend that you call your current insurance company or insurance broker right away. If you do not have a preferred company, I will be happy to recommend several names.
Your lender requires that you keep the property insured against damage or destruction and name them as the co-insured. This is referred to as hazard insurance.
Homeowner’s Insurance is hazard insurance plus liability and contents coverage for the owner. Almost without exception, purchasers obtain Homeowner’s Insurance. Your policy must be paid for and a binder issued prior to settlement. Evidence of such must be delivered to the lender prior to funding the loan.
For Condominium Purchasers: The master policy covers the structure of the building on behalf of you and your lender and is paid for in your condo fees. However, this provides no liability and contents coverage for you, and no coverage if another unit is damaged by something that occurs within your unit. Please speak with your insurance agent to discuss adequate separate coverage for your personal belongings.
STEP THREE : Search for Homes
Be clear about what you are looking for.
Identify and communicate to me what is important to you and why. Letting me know your “why” helps me look for acceptable alternatives when your dream home doesn’t immediately appear. Please let me know what your absolute requirements are and I can save you a lot of time during the search process.
FINDING THE RIGHT HOME
Your Priorities May Shift
A word of caution: As we begin this process, you may have “needs” in mind that will actually turn into “wants” once we’ve looked at some homes together and there may also be “wants” that turn into “needs.” The “wish list” is a starting point—your criteria may change over the course of our search. If you find this to be the case, please let me know so that I can adjust my strategy to suit your best interests.
I Employ a Host of Tools to Find the Home that is Right for You
- Multiple Listing Service —I create custom reports for my clients containing their specific search criteria. While we are in the process of searching for a home, I will perform regular searches and keep you apprised of any new listings suited to your needs.
- Upcoming Listings —I make it a point to network regularly with my colleagues and learn of any new homes that will be coming on the market, giving my clients a jump on the competition
- For Sale by Owner Properties—I keep my eyes open for “For Sale by Owner” properties that might suit your criteria and solicit the people on my mailing list on a regular basis to let me know if there are any “For Sale by Owner” properties in their neighborhoods
Learn the Neighborhoods.
The goal is not only to identify which areas appeal to you the most, but also identify those to exclude from your future search. Further refine your search based on your neighborhood knowledge base.
Prioritize and Select.
Now is the time to begin looking at homes to select the one you want to buy. As you inspect homes, keep the following in mind:
Love or Like?
- Are you looking for a home you absolutely love or is ‘liking it a lot sufficient? Remember that most buyers choose homes that fit current and pending lifestyles and expect to move several times in their life.
- Identify a Fall Back Home. When entering into negotiations with a seller, it can be very liberating to know that, if this doesn’t work out, there is another home to fall back to. It will also provide leverage during negotiations.
- Would you be disappointed to learn tomorrow that this home has sold to someone else? If the answer is yes, then the time has come to prepare an offer to purchase. Let me know when you are ready to move forward.
WHAT IF WE DON’T FIND ANYTHING?
Most buyers use this opportunity to change some or all of their purchase criteria. Sometimes you need to look at properties that are not what you think you want.
Moving up in range, especially by changing your financing approach, may open up much better possibilities.
Detached, Townhouse, or Condo? Staying in the area and price range, but moving to a townhome or condominium may give access to very workable properties which still meet your essential needs.
Square Footage or Extras? Perhaps you can live without the extra bedroom, garage, or even family room, if everything else works for you.
If you aren’t finding what you want, where you want it to be, it might exist somewhere else. Often the tradeoff is location for a home, or less home in the right location. Keep your options open and ask me to help identify where your criteria might be best met. I will work to find you what you want, where you want it to be and for the price you want to pay.
Hang in there! Revisit your criteria. Also, new listings are constantly coming on the market. Don’t give up.
WHEN WE FIND THE RIGHT HOME
I will do the following:
- Help you plan your offer strategy
- Prepare a comparative market analysis to determine if the price is fair and reasonable
- Help you select the target price to offer for the home
- Help you prepare your offer to purchase with your best interests in mind
- Negotiate the contract terms on your behalf
- Coordinate with the lender to complete the financing
- Schedule inspection(s) and address any issues which arise
- Prepare and finalize all paperwork for closing
- Help you with the sale of your current home, if needed
- Follow-up to make sure you’re happy with your new home
- Stay involved after settlement to deal with any questions you might have
STEP FOUR : Prepare a Purchase Offer
Determining property value isn’t an exact science. The market analysis I prepare will create a value range. Fair market value is what a ready, willing and able Buyer is willing to pay. Final sales price is ultimately determined by the market – the Seller and the Buyer.
Terms to know:
The price at which the seller lists the property for sale. It is the responsibility of the seller to determine the listing price of their property based upon sound advice from a real estate professional.
The most probable price a property should bring if exposed for sale in an open and competitive market, allowing a reasonable timeframe to find a buyer.
This is the price at which the property ultimately sells as determined by the cooperative efforts of the buyer and seller.
I conduct a thorough comparative market analysis of the property you want to purchase as well as any comparable listings. I also analyze market conditions and trends to help you select a target price to offer for the home.
NEGOTIATING PHILOSOPHY & STRATEGY
Take a look at your bargaining position. You are a strong contender if you don’t have another house to sell and if you are already fully pre-approved for a mortgage (letter in hand!) or if you are a cash purchaser. A strong, clean contract is the indicator of a qualified Buyer who is prepared and ready to perform. This will favorably impress the seller and improve the power of your offer.
If this is the case, you may be able to negotiate downward from list price. However, in a fast-paced competitive real estate market, you may want to offer the list price or better, to beat out any other early offers. It is my goal to develop a negotiating strategy that suits your needs and gives YOUR offer the highest probability of success.
Determining your primary objectives is critical to successful negotiating. Which of the following aspects of the property is most important to you?
____ The Property Itself
____ Settlement Date
____ Other Terms
Additional Contract Strategies:
- Significant earnest money deposit
- Fast or reasonable settlement time
- Loan approved (full pre-approval letter to accompany contract)
- Quick completion of contingencies
- Professional contract preparation and presentation
PREPARING YOUR OFFER TO PURCHASE
Your main objective in constructing your offer to purchase is to purchase the home you want at the most favorable terms possible. The strategy is to make your offer as attractive to the Seller as possible while retaining key items for yourself.
Give the Sellers what is important to them in return for terms that are important to you. I will try to find out from the Seller’s agent what the Seller’s critical needs are. If you can meet these, it gives the Seller a reason to agree to reasonable requests from you. There are seven areas of negotiation in your offer:
- Offering Price: The most important issue for most Sellers is the amount they will be receiving for the home. I will assist you in identifying the most appropriate offering price for your offer.
- Subsidies: Are you going to be asking the Seller to pay expenses, such as closing costs, on your behalf? If you are, remember you are reducing the net proceeds to the Seller thereby reducing your ability to negotiate the price as well. Also, subsidy amounts may be limited by the financing your are using. Consult your lender for details.
- Earnest Money: Your earnest money (deposit) amount signifies your commitment to the transaction. Low deposits reduce the desire of the Seller to accept your offer. Again, I will help you determine the amount you need to give the Seller with your offer, to increase the likelihood of success.
- Settlement and Occupancy: The contract specifies a day and time for you to receive occupancy of the home. If you can close when the Seller wishes to move, your offer will be positively viewed by the Seller. If occupancy will not concur with the closing date, this should be noted in your offer and the proper agreements made.
- Property Condition: If you know you want to the Seller to make repairs before you have done your home inspection, then they will need to be included in your initial offer. Otherwise requests for repairs will normally be made after receiving the inspection report.
- Inclusions & Exclusions: The Seller is offering to include certain items with the sale. Sometimes Sellers offer to replace an item they wish to retain when they move. Please be sure that your offer accurately reflects both of these.
- Contingencies: A contingency is a clause which states that the Buyer will purchase the home only if something else happens. Normal contingencies include Buyer’s financing, home inspection, and/or the sale of the Buyer’s current home. The fewer contingencies your offer contains the more desirable your offer will be to the Seller. I will help guide you through this.
Demonstrate your ability to purchase by delivering one or more of the following:
- Lender Pre-Approval or Commitment Letter: This is the letter required to remove the financing contingency in sales contract.
- Bank Statements: To show the existence of sufficient cash to buy the home, especially when the contract is an ‘all cash’ offer.
- Financing Statement: May be presented to the Seller when submitting an offer prior to obtaining a Commitment Letter.
Write a clear, concise offer.
Once I have thoroughly discussed your needs and wants, and answered all of your questions about the offer you want to make, I will put together a contract and present it to you to sign. Once I have your signature I will present the contract to the Seller’s agent.
Giving the seller everything, and more!
When competing against other offers, your only option may be to give the Seller everything and be willing to pay more than the asking price. There are pros and cons to doing this, however I can give you the information you need to make the best decision for you.
STEP FIVE : Contract for Your Home
WRITING THE CONTRACT
Approaches to Negotiation
Every Buyer and Seller has different levels of risk-tolerance. We can discuss these approaches to writing an offer when the appropriate time comes.
Extreme or Fair Initial Offers:
Extreme offers generate extreme responses and often create a difficult environment for future negotiations. Fair initial offers far more often create a climate of trust between the parties and lead to mutually satisfactory transactions. The worst thing you can do is deliver an offer that offends a Seller or insults his/her home and leads them to feel that you are not a person they are willing to work with in the future.
Offers Generate Responses:
When creating an offer, ask yourself this question. “If I was the Seller of this property and I received this offer, how would I respond to it?” If the answer is not the one you like, then alter the offer until you feel that your offer will be well received.
The Negotiation Process
Submitting the Initial Offer:
- Presentation: Most offers today are delivered to the Seller’s Agent for presentation. It is rare that I will have the opportunity to present your offer to the Seller in person.
- Personal Letter: You may want to consider including a personal letter to the Seller with your offer. We will discuss this strategy if it seems appropriate.
- Questions from the Seller or Seller’s Agent: Be prepared to hear from me prior to any acceptance or counter-offer with questions from the Seller or Seller’s Agent. You must be easily available (sometimes by both phone and email) to answer them in order to facilitate an agreement.
- Acceptance: Your offer will be signed as written.
- Counter Offer: Your terms will need to be modified in order for the Seller to agree to them.
- Rejection: The Seller refuses to enter into negotiations with you because of a perceived inability to reach agreement. The offer is returned marked “Rejected”.
- No Response: The Seller simply chooses not to respond. Your offer becomes void at the when the date and time specified in the contract as the Acceptance Deadline passes.
Response to Counter Offers:
Your response to a counter offer should be handled as quickly as possible in order to avoid a change of heart on behalf of the seller.
MUTUALLY EXECUTED CONTRACTS & MULTIPLE OFFERS
Mutually Executed Contracts (MEC)
You will have an MEC when:
- All parties have agreed, in writing, to all the terms without addition or amendment; and
- A copy of the fully signed contract is delivered back to the other party.
Negotiating When There Are Multiple Offers
- Awareness: You may or may not know if you are competing against other offers. The Seller may, but is not required, to disclose this.
- Acceptance: Seller will accept or counter only one offer, in most cases.
- Best and Final: It is possible that the Seller will counter none of offers and send them all back out, asking for the Buyer’s “best and final offer”.
STEP SIX : Conduct Inspections
HOME, RADON, AND LEAD INSPECTIONS
Your sales contract may contain a number of inspections as a condition of your sale. Whether or not you include inspections in your offer will depend on market conditions, the property, and your comfort level. The most common inspections are a general home inspection and an inspection for the presence of radon gas.
- Consider scheduling your inspection at the time your prepare your offer to purchase.
- Have the inspector show you what he or she found. Most inspections will take two to three hours and are as much about education as discovery.
- The purpose for an inspection is to uncover any significant problems that might cause you to renegotiate your agreement or, in extreme cases, even void it.
- If you ask the Seller to fix certain items, you are in effect saying that you will only purchase the property if the Seller agrees to the repairs. Be sure that your response to the inspection accurately and clearly reflects your objectives.
- The dates referred to in the home inspection paragraph are ‘hard dates’ and must be met in order to maintain the validity of this agreement. Please consult with your me carefully at every step of this process to stay on top of our deadlines.
- Radon tests may be performed by your home inspector. It will take three days to obtain a reading with reasonable accuracy.
- The EPA has set a safe standard at less than 4.0 picocuries per decaliter. Any readings of 4 and above should be remediated.
- Just as with the home inspection, the dates for performance are ‘hard dates’ and should be taken very seriously. Again, consult with me for guidance.
HOMEOWNERS ASSOCIATION DOCUMENTS
If you have purchased a condominium or a home with a Homeowners Association (HOA), you have the right to review the legal and financial documents connected with the community. Your review might include, but not be limited to the following:
- Fees, what they include and any plans for increasing them.
- Rules and regulations, in particular those dealing with parking, trash removal, and what you are allowed to do with your property’s appearance.
- Pending suits.
- Anticipated major renovations.
- Financial statements and meeting minutes for the HOA
As with the inspection deadlines, the deadlines for reviewing these documents are “hard dates” and must be taken seriously.
STEP SEVEN : Finalize Your Financing
WHAT YOUR LENDER NEEDS
Your lender needs to receive:
- Copy of the Sales Contract (I will provide this.)
Documents pertinent to loan application (You will provide these.)
Your Lender will order the appraisal.
Your Lender will prepare a new Good Faith Estimate of your settlement charges.
IMPORTANT: Please do not attempt to change lenders from the company which issued your commitment letter without fully discussing it with me. Changing lenders at this point creates the very real possibility of not being able to meet your settlement date, defaulting on your financing and/or placing your deposit in jeopardy. Using an Internet-based lender is problematic. I cannot help facilitate the process when a client uses an Internet lender. I highly recommend the use of a local lender.
STEP EIGHT : Prepare for Closing
SCHEDULING YOUR CLOSING
Choosing Who to Represent You For Closing
Unless agreed to otherwise, the Seller usually has the right to choose the settlement attorney or title company who will conduct the closing.
Ordinarily, the title company or attorney does not represent either of the parties but is retained to follow the instructions of the sales contract, agreed to by the two parties.
Timing of Closing
Closing should be scheduled as soon as possible to insure that the most convenient time will be available. Closing companies become very busy during the last week of each month. A request for a change in the date and time may not be possible as the closing date approaches.
Title Search & Surveys
The closing company will search the title and order any required surveys.
PREPARATION FOR CLOSING
You will be required to bring several items to closing, including your driver’s license and a cashier’s or certified check for the balance of the down payment and closing costs.
Closing Costs May Include:
- Loan origination fee
- Loan discount (s) or points
- Appraisal fee (due with mortgage application)
- Credit report (due with mortgage application)
- Underwriting and document preparation fees
- Mortgage insurance fee
- Assumptions fee
- Settlement or closing fee
- Abstract or title search
- Title examination
- Title insurance binder
- Survey fee
- Transfer tax
- Recordation tax
- Escrow for taxes and insurance
Once all inspections have been done and your financing finalized, you will need to attend to the following. The earlier these are done, the fewer last minute surprises will arise.
Contract with your mover.
Unless otherwise agreed in writing, you will not receive keys to your new home until closing and the delivery of the deed. We will need to have a written agreement with the Seller for you to move in earlier.
Contact utility companies.
Gas, Electric, Water, Telephone, Cable, Trash
Obtain check for required cash to settle.
Are you going to be using funds generated by the sale of another residence as all or part of your own down payment on this one?If so, be sure that we have discussed this with your closing company and have coordinated the timing of the two closing to allow for an Assignment of Funds.
A cashier’s check or wire transfer will be needed to pay the amount required from you at closing.
Establish time of walkthrough.
I will coordinate the walkthrough with both you and the Seller. Normally the walkthrough will take place within 24 hours before closing and after the Seller has vacated the property.
LOCAL UTILITY INFORMATION
** This is an up-to-date list of local utility contact information. If you find that any of this information is outdated, please let me know! Additionally, if you find that one of your service providers is not listed here, please let me know that as well so that I can add them in the future!
CITY OF GRAND JUNCTION & MESA COUNTY
- Electricity: Grand Valley Power
- Electricity: XCEL Energy
- Gas: (insert website)
- Local Phone: Embarq (CenturyLink)
- Cable: (insert website
- Cable: (insert website)
- Cable: (insert website)
PURCHASING TITLE INSURANCE
At Closing, You Will Be Offered Title Insurance. I Always Recommend Purchasing It.
What is Title Insurance?
Before answering “what is the title insurance”, it might be best to first answer “What is title?” “Title” is the ownership in real property. Among other things, it means that you have the legal right to possess, occupy, peacefully enjoy and sell your property without interference from others, subject only to restrictions imposed by governmental authorities or previous owners. In most cases, title is transferred by deed which is recorded in the land records of the county in which the property is located. Generally, when property is sold, an attorney for the Buyer or a title examiner goes to the record room and searches the land records for any title defects. A title defect is anything in the entire history of ownership of a piece of real estate which may encumber the owner’s rights under the title. A title defect may cause the owner of real property to lose all or part of his land to a superior ownership interest or claim of another. This is the type of loss which title insurance protects against.
In short, if you own a title insurance policy, the title insurance company will defend you, without cost, against an attack or claim upon your ownership interest in your property as insured and you will be protected against financial loss caused by a title defect.
If my title has been examined for defects, why do I need Insurance?
There are many defects which even the most meticulous search of the land records will not uncover: For instance, it is impossible for an examiner to know whether the marital rights of all previous owners have been relinquished; whether all deeds, mortgages and judgments affecting the property have been properly indexed in the land records; whether all signatures are valid; or whether an unknown heir of a previous owner had a valid claim against the property. Without owner’s title insurance you may have no avenue of recovery for these types of problems.
If I have to purchase lender’s insurance, why do I need owner’s coverage as well?
In almost every instance, a lender will require you to purchase lender’s title insurance protecting it up to the value of its loan on the property. This coverage only protects the lender, not you, and the coverage diminishes as the loan is paid off. As you build more equity in the property, you expose yourself to a higher risk of loss occasioned by a title defect. In this situation the protected lender will suffer no loss while you as the owner of record bear the substantial risk of the damage. Owner’s title insurance will protect you against any covered loss from failure of title up to the full amount of the policy.
What are some reasons or examples of why I should have Owner’s Title Insurance?
Owner’s Title Insurance will protect you against those hidden risks which would not be disclosed by even the most meticulous search of the public records. Some examples of those hidden risks are:
- Inadequate Surveys
- Fraud in connection with execution of document
- Incorrect legal descriptions
- Undue influence on a grantor or executor
- Non-delivery of deeds
- False impersonation by those purporting to be owners of the property
- Unsatisfied claims not shown on record
- Incorrect representation of the marital status of grantors
- Deeds executed under expired or false powers of attorney
- Undisclosed or missing heirs
- Confusion due to similar or identical names
- Wills not properly probated
- Dower or curtsey rights of ex-spouses or former owners
- Mistaken interpretation of wills and trusts
- Incorrect indexing
- Mental incompetence of grantors
- Clerical errors in recording legal documents
- Conveyance by a minor
- Delivery of deeds after death of grantor
- Birth of heirs subsequent to date of will
Are there different types of title insurance?
Yes. There are three different types of Title Insurance. A Lender’s Policy, Standard Owner’s Policy and the Owner’s Advantage Policy.
Lender’s Coverage is required by all corporate lenders as a condition of the purchaser’s loan. This covers only the lender for the amount of the loan they are making to a borrower. The Lender’s Policy that the lender is provided with is the standard ALTA 1992 Loan Policy, It provides coverage to the Lender against such title encumbrances as fraud in connection with the execution of the document, incorrect representation of the marital status of grantors, wills not properly probated, and many other circumstances that might jeopardize the Lender’s security in the property.
The Standard ALTA 1992 Owner’s Policy protects you as the owner of real property against fraudulently executed documents, incorrect representations and improperly probated wills as well as any unsatisfied claims that may not appear in the County land records.
The Owner’s Advantage Policy covers you, the owner against all that is included in a standard ALTA 1992 policy but with additional and enhanced coverage. Subject to limitations, some of the benefits of an Advantage Policy include:
- Mechanic’s lien coverage is provided for work done prior to the date of your policy.
- Zoning coverage is now provided, insuring that your land is properly zoned for a single-family residence.
- Subdivision coverage is now provided in the event your land is a portion of an improperly created subdivision.
- Coverage is provided if you as the owner are forced to remove an existing structure, other than a boundary wall or fence, due to a previous owner’s failure to obtain the necessary building permit.
- Coverage is provided if an adjacent builder builds onto the homeowner’s property without permission.
- Coverage is provided for forgeries affecting your ownership after the date that your title insurance policy is issued.
STEP NINE : Final Walk-through
CONDUCT YOUR FINAL WALK-THROUGH
Your Right to a Walk-Through
The Virginia Association of Realtors® Sales Contract allows for the purchaser to conduct a final walkthrough inspection prior to settlement. At the end of the walkthrough, the buyer signs off on the Walkthrough Inspection Form. This form signifies the buyer’s acceptance of the property in it’s current condition and notes any contractual deficiencies. Therefore, this inspection is best performed after the seller has vacated the property. I will be happy to attend the walk-through with you. We will arrange this time/date amongst ourselves very close to the date of closing.
The purpose of the walk-through is:
- To be sure that all included appliances, HVAC and plumbing, are in working order, as per Paragraph 3. Make sure to test all appliances, and run water from all water sources to check for leaks.
- To ensure that the property is free and clear of debris, broom clean, and in substantially the same condition as date of contract.
- To ensure that any contractual obligations have been met.
Paying for Repairs
Since lenders normally forbid the creation of an escrow fund to allow for repairs not made prior to settlement, if may be possible—with the mutual agreement of the seller and the buyer—for the seller to credit to the buyer an amount that allows for the buyers to make the repairs themselves at a later date. This should be arranged prior to settlement taking place.
STEP TEN : Closing
Attend Your Closing
Prior to the Meeting
- Resolve walkthrough issues: Any monetary issues arising from your walkthrough need to be resolved before the final settlement statement (the HUD 1 form) can be prepared. I will attempt to resolve these prior to closing but, if not, these must be discussed before anything else takes place.
- Review the HUD 1 settlement statement: Together, we will review the statement to be sure that all charges and credits are the correct amounts and charged to the proper people.
- Review sample closing documents: If you are going to want to read all the documents prior to signing, please do so prior to closing by either arriving early or making arrangements to receive a sample set.
Important Things to Understand about Closing Days
Closings are typically scheduled every hour so please allow for one hour in order to complete the process. Late in the day closings are often delayed so do not be surprised if your 3 PM closing doesn’t start until 3:30 or even 4 PM. Additionally, if you go to closing after 1PM, please know that your home may not record (and you may not be able to take possession of it) until the FOLLOWING BUSINESS DAY.
Avoid Friday closings when possible – a Friday closing often leads to a late recording, which cannot take place over the weekend and must then wait until Monday. If you plan to have access to your home over the weekend, schedule an earlier closing to allow for unexpected delays.
The typical closing meeting agenda is as follows:
- Resolve remaining walk-through issues
- Approve HUD 1 statement
- Purchaser selects title insurance coverage
- Seller signs the deed (In Charlottesville the Purchaser and Seller typically attend their own separate settlements and do not meet face-to-face. The seller will have signed the deed prior to our settlement time.)
- Purchaser signs loan documents:
- Loan application
- Truth in Lending statement
- Deed of Trust
- Seller’s attorney or closing company provides the keys to purchaser’s attorney or closing company