Real Estate Curve

Everything To Know About Real Estate

Archive for the ‘Closing’ Category

Feb-11-2008

Real Estate Lawyers Services

Why are lawyers required when you buy real estate? It is not a legal requirement to use a lawyer, but it will save you a lot of time and frustration and make the sale much smoother. Lawyers specializing in real estate will be well worth the cost. For their fee, they will:Search the property’s title to ensure there are no existing mortgages or liens registered against it;

Search the City Zoning Department to make sure the property complies with zoning;

Search gas, water and hydro records to determine whether there are any appears or work orders attached;

Determines if property taxes are paid;

Prepares the land transfer tax affidavit;

On closing day, goes to the Registry Office to register the deed and mortgage.

In addition to their fee, you are responsible for the lawyers “disbursements”. These include fees the lawyer paid on your behalf, plus any long distance calls, photocopies, etc. Other closing costs include your share of the property taxes, and leftover heating oil, if applicable. The Statements of Adjustments will itemize all amounts.

Posted under Buyer, Closing, First Time Buyers, Seller
Jan-20-2008

Fees And Closing Costs Explained

FEES AND CLOSING COSTSThere are a number of costs associated with buying a house in the Halifax area. Here is a summary of most of them:Legal fees– You will need a lawyer to complete the purchase of your home. Legal fees vary from lawyer to lawyer but on average it is safe to allow $650 – $800 for legal fees and another $300- $400 for disbursements such as registering the deed etc. The legal fees for a purchase of a $100,000 home would be about $650 for the lawyer and $350 for disbursements for a total of $1000.Deed Transfer tax– The municipality the home is located in will charge a fee to transfer the deed into your name. In most of the metro area this fee is 1 1/2% of the purchase price of the home. For example in a $100,000 purchase you would pay $1,500 deed transfer tax. This tax is paid on closing to your lawyer who then pays the municipality.

Mortgage application fees– There are sometimes fees for applying for a mortgage and an appraisal of the property you want to purchase.If you are borrowing more than 75% of the value of the property there will be fees for sure. These fees vary but count on about $300 – $400. This is paid to the lender at time of mortgage application.

Moving costs– There will be some cost to move to your new home. If you are moving a long distance get a number of estimates before deciding on the moving company. Even a local move will cost you.

Building Inspection Fee– It is a must to have the property you are buying inspected by a professional inspector. They will check out the home for structural soundness. The cost for this service for Amerispec for example as of Jan 2008 is about $399 incl tax but varies from inspector to inspector.

Power and telephone hook ups– Allow for the cost to reconnect your telephone and power. Allow $75 each for these.

Tax adjustment– The owners of the home you are buying have paid yearly taxes the municipality. You will be required on closing to reimburse them for the taxes they have prepaid for the year. For example if they had paid $2,000 for the whole year and you were closing June 30th you would be required to pay the owner half of the taxes prepaid or $1,000. Count on 1/2 a year’s taxes and you will be more than safe.

Fuel adjustment -If the home you are buying has oil heating or has a propane fireplace you will be required to pay the owner for a full tank of fuel on closing. The owner will fill the tank(s) the day before closing. You will pay this at your lawyer’s office on the closing date. The cost for this will vary. As of Jan. 2008 a full tank of oil would be about $900 and a full tank of propane is about $400.

Fire/Homeowner’s Insurance– You will be required to have fire insurance on your home on the day of closing. The mortgage company requires the lawyer to have proof of this on closing. This can often be arranged in monthly or other installments. $700-$900

Water quality and quantity tests
– If the property you are buying is on a well the mortgage company will require that you obtain a water test for quality. The water is tested for bacteria, arsenic and uranium. The cost to have this test completed if you do it yourself, which is the most common, is about $100. You should also consider having a ” Flow Rate” test completed also. This test will determine the amount of water the well is currently producing. The cost to have a professional do this is between $200 and $400. This is an optional test but one I would strongly recommend.

Septic field test
– If the property you are buying has a septic field is it advisable to have it tested for leaks etc. This costs about $300 to complete.

New Appliances, curtains etc..- You will need appliances for your new home as well as curtains and other necessary items. Allow enough for these items in your closing cost calculations.

Posted under Closing
Jan-20-2008

What fees are involved in the closing costs?

It depends which side of the table you’re sitting on. If you’re a buyer, you’ll get a list of your expected closing costs when you first sign up for your mortgage as part of what’s called your “good faith estimate.” But you won’t really be able to know the exact dollar amounts until the end of the process because many of the costs are based on percentages. Additionally, some things on the list won’t apply to your purchase because of your state or your type of property. In general, though, you can expect your total closing costs to add up to about 1 to 4 percent of the purchase price, and that’s above the down payment.

The major players your dollars are going toward are your lawyer, the bank, the title company, and the government. Your lawyer will likely charge you a flat fee but may itemize for document production, couriers, and postage. The bank will include its mortgage application fee and appraisal charge, which you probably paid well before the closing, and also fees for documents, underwriting, and all the costs associated with the mortgage. The title company will have a hefty insurance fee. And the government will put in for recording fees and other taxes.

If you’re a seller, your major cost will be paid to your real estate broker, who will likely get 3 to 6 percent as a fee. Your next biggest check will go to the government, which will want a transfer tax of 1 to 2 percent, depending on the state. Then you’ll have lawyer fees, miscellaneous bank fees, and document processing fees. Altogether, these charges could add up to anther 2 to 7 percent. So when you calculate the profit you’re going to make, be sure to subtract at least 10 percent for the cost of doing business.

And if you’re buying a new home at the same time you’re selling the old one, prepare yourself for a double whammy. There’s nothing you can do to help being charged on both ends of the equation. But hey, look at it this way: You’re unloading your old digs to transition into your dream house, which is worth every penny.

Posted under Closing
Jan-18-2008

Do I Worry About Closing Dates

All of your future plans as a buyer or seller revolve around the closing day, so it is indeed an important day to keep at the forefront of your mind. Closing day is the day that title irrevocably changes hands, the day that the sellers receive their money and give up vacant possession of the house to the buyer.

The closing date is negotiated as part of the sales contract. The timing of the closing date may be of vital significance to the sellers. They may have bought another property and may need the funds they receive from selling their house to complete the other deal. The buyer also may be committed to vacating their present home at a certain time and be concerned that the closing happens before a certain date.

There can be unforeseen and unavoidable delays in getting agreed upon repairs done or in getting financing in place. If you do find yourself in a position in which you feel that you may not be ready for closing on time – immediately contact your Realtor®. Your Realtor® will contact the other parties Realtor and something can usually be negotiated that will solve any problems created. The other party may be flexible as to the closing date. The buyer may accept a cash settlement in lieu of repairs.

Every problem has a solution and it is part of your Realtors® job to help you find those solutions!

Posted under Closing
Jan-18-2008

Delays at the Closing

Most of us find that major changes in our lives are easier if we plan ahead. The time just before the planned closing day is often spent making arrangements for the impending move.

There are utilities and mailing addresses to be changed, movers to be arranged and many other details to be taken care of. While it will indeed make your move easier if you are well organized, please hold in mind that the closing may possibly be delayed.

Any one of the parties concerned in the closing may cause a delay – there may be a delay from a financial institution or perhaps the conveyancer has unearthed a snag that needs to be dealt with. So keeping in mind that delays are possible when you make your moving plans may save you some physical or financial inconvenience. Your Realtor® will let you know about any potential delays as soon as they come up.

Posted under Closing
Jan-18-2008

Dealing With Liens

A lien is a legal claim against a property. A lien can be put against a property by anyone who is owed money by the property owner.

The lien holder may be a contractor or a former spouse. The lien holder may even be deceased.The lien stays with the title – regardless of who owns the property. This is the reason why title searches are essential.

In order to clear a lien, it must be paid, the lien holder (or his executor) must “sign off” or a bond must be posted. Posting a bond would be done most often when the present owner of a property wishes to sell but is disputing the validity of the lien.

The owner can post a bond, thereby releasing clear title to the house and then deal with the lien holder in court. When someone signs off, it generally means that they sign a “quitclaim” deed. Signature of this deed means that the lien holder releases any rights he may have, without laying claim to the property.

If a lien is discovered against a property you wish to buy or sell, your Realtor® will be able to advise you as to your options.

Posted under Closing
Jan-18-2008

Closing Tips

The day that you sign the papers finalizing the purchase or sale of your home should be a time for celebration. Arriving with unresolved issues and needing to work things out at the last minute can turn what should be a happy occasion into one that feels tense and adversarial.

Try to make sure that all details are taken care of in advance. If there is a problem (perhaps agreed upon repairs are not finished) let your Realtor® know in advance so there is time to deal with things before arriving at the closing table.

It is much better to advise your Realtor® of any problems that you may anticipate, even if they seem minor, than to allow a small problem to escalate to a potential deal breaker. A “stitch in time” may save you nine!

Posted under Closing
Jan-18-2008

Closing Questions

When you arrive to sign documents it is not uncommon to be a bit nervous. At times you may be dealing with a classic case of “buyers remorse”. Having this remorse is much like having the jitters on your wedding day – they are both uncomfortable feelings, but seem to go with the territory when we make major life decisions.

You may just be tempted to sign everything put in front of you but please take the time to check the accuracy of all details. These papers are frequently filled out under time constraints and it is possible for honest errors to be made in any area. The legal address of your new home may be wrong – or perhaps your name is spelled wrong.

Any errors can usually be sorted out after the fact but that could prove costly. Realize that when you sign these documents you are agreeing to all that they say.

Refer to the advice given in the FAQ “Be Prepared For the Closing” as to how to lessen any anxiety at the document signing. Do not hesitate to ask any questions that you may have about the closing documents.

Now that you are at the final step in acquiring your new home, make sure the details are correct. After all, finding out we mistakenly contracted to buy the wrong house would be like waking up married to the wrong person!

Posted under Closing
Jan-18-2008

Clearing Liens

It is hard to believe, but it actually is possible for someone to put a lien against your property without you being aware of it. If a title search turns up a lien and you are the purchaser, don’t automatically assume that the seller knew about it and was being underhanded.

In some areas, in the past (hopefully it is not still going on!), notice of a small claims action filed against you would not in fact be delivered to you as required by law. It would be just thrown in the garbage – delivered via “sewer service”. You would not show up in court, the complainant would automatically win, and a judgement could be filed against your home.

In the case of a legitimate lien, you will have to pay it in order to have it signed off. If you are disputing the validity of the lien, you will most likely need an attorney’s help. You may also discover liens registered by heirs or ex-spouses of a former owner of the house. You will need to have these people, or if necessary, the executor of their estate, sign off on the lien.

If a hold has been put on by a local government body due to noncompliance with some ordinance you will generally have no option but to bring the problem into compliance before you can sell.

Posted under Closing
Jan-18-2008

Be Prepared For The Closing

When you close a deal to buy a house you will arrive and a pile of documents will be put in front of you. No matter where in the country you purchase a home there are numerous documents to sign.

The way in which you handle signing these documents is governed by both your past experience and personality. If you are familiar and comfortable with signing complex legal documents, and can read rapidly, you will be comfortable dealing with the closing – you most likely don’t even need to read further here!

If purchasing a home and dealing with documents is new to you, you may want to do some advance preparation. Most of the writing on these documents is standard form (sometimes called boilerplate) and if you want to read all the writing on each page before you sign you will be sitting reading for a long time.

In order to avoid making the signing a lengthy process for all concerned, you can ask for copies of the standard forms in advance and read them at your leisure. You can then ask for help in clarifying anything that you don’t understand. At the signing you will just need to go over the details of your deal that are filled in on these standard forms.

So, if you’re a bit unsettled about dealing with documents – ask for copies of the forms and consult with your Realtor® or attorney before the closing. Signing the document for the purchase of your new home should be a happy occasion – not an intimidating one!

Posted under Closing