What is a deed?
Deeds are legal documents that convey ownership of a property. A deed must be written in specific language, and it must follow state laws and include the names of the buyer and seller, as well as any necessary notary signatures. These documents can be difficult to understand, so it is best to have an experienced attorney prepare and review your deed so that you do not risk losing your home or property rights.
What are the most common forms of deed?
There are many types of deeds. The most common form of deed is a warranty deed or sometimes called a grant deed. A warranty deed transfers ownership and explicitly warrants the buyer that the seller has good title to the property. This means that the seller must promise good title, with no liens or encumbrances not disclosed in the deed. A warranty deed offers the greatest protection for buyers since it promises good title and makes no false claims about what that title is or what it means for your property.
Which are the forms of title available?
When two or more people are purchasing property together, the real estate lawyer must also determine how they will take title. Many times this involves a tenancy in common, which is a form of shared ownership where multiple people own property without the right of survivorship. When one tenant in common dies, the interest of the deceased owner passes to their heirs or the persons named in their will. A joint tenancy involves the right of survivorship and can only be created between spouses in some states. Some states also recognize a tenancy by entirety which is a form of joint tenancy that can only be created between spouses.
Is the home inspection recommended?
A home inspection is a non-invasive examination and evaluation of systems and components in the home to prevent future costly repairs. The purpose of a home inspection is to disclose defects that could materially affect the safety, soundness, or livability of a residential property. A professional Home Inspector will provide you with a report that details any defects they find during the initial inspection. This can help you decide whether to purchase a property or not, therefore avoiding expensive surprises in the future.
What is the difference between a co-op and a condominium?
Condominiums are generally easier to understand than co-ops. In a condominium, each unit has its own deed and its own mortgage. Maintenance fees and deed restrictions are established by the condominium association. In a cooperative, however, residents typically purchase shares of stock in a corporation that owns the building and all of its common areas or amenities. When owners sell their shares or withdraw from ownership, the unit can be sold along with shares unless special arrangements have been made. Because the communal areas are owned by the corporation that drafted rules governing those spaces, cooperative apartments often require more attention to maintenance and upkeep than do condominium units.
What is the role of the real estate agent?
When purchasing a home, the most common fixture of the real estate purchase decision is the consultation with a realtor. A realtor is an agent of either the buyer or seller and is the intermediary for negotiations between parties. A realtor can be paid based on either a flat rate or commission. If a flat rate was agreed upon with the seller, then the writing must show this clearly and have any hidden costs articulated. The terms of a contract between a buyer and seller usually require that a real estate broker play the role of an agent for the parties. Accordingly, the broker will be trying to get the best deal for the seller. The buyer can enter into a written agreement with his own broker in which the broker would be designated a buyer's broker. Even though the broker's compensation is paid by the seller, a buyer's broker owes his loyalty to the buyer and will strive to get the best deal for the purchaser.
What is a binder and is it the same as a contract of sale?
A binder is a non-binding agreement that sets forth the terms of the contract between buyer and seller. If you receive an offer without a binder, it may be a pre-qualification letter, which means the buyer is just getting an idea of what they can afford. After submitting their bid, they have the option to not proceed with the offer to purchase if it’s more than they are able to afford.
What is title insurance?
To legally record the sale, the buyer's attorney will arrange for a title search. This ensures that the seller has the legal capacity to make the sale and there are no impediments to the buyer acquiring the title to the property free and clear. Title insurance covers matters that occurred before the policy's effective date, but was discovered later.
What is the difference between the owner's policy and the mortgage policy?
There are two kinds of title insurance: the owner’s policy and the mortgage policy. The owner’s policy covers losses or damages you suffer if the property really belongs to someone else, if there is a defect or encumbrance on the title (such as unpaid taxes), or if the title is unmarketable. The lender's mortgage policy protects the lender. It includes all the protections from the owner's policy as well.
What happens at the closing?
The settlement, or closing, is the meeting during which ownership of the property is transferred from the seller to the buyer. The buyer, seller, and their representatives meet with their broker, attorney, and closing agent at the closing to complete the transaction. A mortgage or title company represents the lender in transferring title to a property. It may also assist in processing documents related to any associated loans taken out during previous transactions. In addition to these documents, homeowners will sign off on deed assignments and documents regarding property taxes or maintenance. The sellers are also responsible for turning over any keys that were not turned in during closing proceedings.
What is included in the closing costs?
The closing costs for a home sale can vary based on the amount of the loan, the loan type and term, any points paid, and other specific costs associated with your property. Closing costs are one of the least understood aspects of the home purchase process. Common closing costs include attorney fees, escrow fees, property taxes to cover the period to the closing date, interest from the closing date to one month before the first monthly payment, loan origination fees, and recording fees.