Closing the deal: guide to real estate transactions
You might have heard about closing the deal a thousand times before, but what does that really entail? Real estate transactions can be a very difficult experience that is consisted of several parts, each more complicated that the other and it is not always easy to determine where one ends and another one begins. Undoubtedly, the most difficult part of real estate transaction is closing the deal. That means that you have actually signed the papers, that everything is arranged and it has been taken care of. The process that takes place from accepting the offer and then actually selling or buying a house is a bit more complicated that one might think, which is why we have created this guide to real estate transaction, to help you understand what it takes to close the deal.
Experts suggest that you should hire an escrow for a real estate transaction
There are two parties that participate in real estate transaction, the buyer and the seller. Everyone is protecting what he finds important and it comes as a no surprise that a lot of people will try to trick you. Also, you should not be able to trick them. There are many things that can go wrong in a real estate transaction. In order to prevent this from happening and have both sides come out completely satisfied it is customary to hire a third party, called an escrow that is entirely neutral and will make sure that both parties get what they want.
Make sure that you are protected by obtaining title insurance
If you do a thing called title search (you can obtain more info here) you will confirm if legally there is someone else listed as the owner of the property you are buying. If this is not the case, you can obtain a title insurance and have a legal safeguard. This means that further down the road no one can come and claim rights on the property you have bought. Although it seems like a normal thing to do, many people don’t, leaving the option of scams in the future, and problems caused by long lost relatives. Avoid all of them by being responsible and obtain title insurance before closing the deal.
If you feel like all of this is too much for you, hire an attorney
Sometimes all the legal talk can be a bit too much. If you don’t have confidence in the other party, if you see that they come very protected, informed and ready, perhaps it is better for you to hire an attorney. This isn’t a necessary step but it is more than suggested if you feel that you can’t keep track of all the legal mumbo jumbo taking place during a real estate transaction. Look for a lawyer that has experience in this type of things, and that can go through the paperwork and see if you are protected before you close the deal and get yourself in trouble.
Invest time and money into performing a home and pest inspection
During a real estate transaction, many things that seem like a waste of money will actually help you a lot further down the road. Don’t engage in any closing, if you haven’t performed a home and pest inspection. This is not a step that is legally obligated but it is practically common sense to have them performed. Home inspection will reveal if there are any problems with the house you might have missed and the owner is hiding, or not even aware of. In this case, you can either back out of the deal, ask the seller to change the price or to fix it before you sign the papers. In addition to this, it is highly recommended that you should do a pest inspection as well because this might reveal that the house is suffering from termites or some other type of wood-destroying insects. This problem, undetected, can completely ruin your entire house. When you do find out about it, you can arrange something with the seller, and organize the cleaning before you close the deal. Either way, it is important to know.
Ask your real estate agent about contingencies
Drawing a purchase offer is part of the real estate transaction that you do together with your real estate agent. If you have chosen a good one, that means that they have created an offer contingent of several things in order to protect you in any situation:
- The seller should be obligated to perform any repairs that you have agreed on
- Home inspection should not reveal any problems with the house
- Pest inspection should not reveal any infestations or unrepairable damage to the house
- Interest rate should not exceed a percent that has been previously arranged
It is customary for these contingencies to be removed as soon as they are completed, but there has to be a date fixed to them so that a real estate transaction won’t last that long.
Taking part in any real estate transaction can be a very difficult and exhausting experience. You have to make sure that no one is trying to scam you, you need to hire responsible people that will protect you and not rip you off, and you need to make sure that you have hired a house you really want. All of this will not be done overnight. Be patient, make sure that everything is like it should be, and trust your gut. You are not doing anyone a favor by engaging in a transaction you don’t feel comfortable. Don’t close the deal out of need and pressure, buying a house is a very important life event, you do not want to do it lightly. Go over this guide and make sure you have done everything you need in order to protect yourself and to participate in a win-win kind of agreement, with both parties completely satisfied.