We just signed the offer; when can the movers come?
Generally when the buyer is getting an institutional first mortgage, the closing process should take eight to ten weeks (assuming there are no title problems or other issues with the process). The movers probably will not need much lead time, and you do not want to commit to a date you cannot honor.
Isn't the Purchase & Sale just a form contract?
The purchase and sales contract is the document by which the purchasers commit themselves to purchase the home and the sellers commit to sell. It should contain all of the terms of the sale and provide for any contingencies. This contract can be almost infinitely modified to reflect the unique circumstances of each sale. Although some people use "form" contracts, almost every contract has its own individual provisions, which affect the rights and obligations of the purchasers and the sellers. Both parties should take great care to read and understand every provision in the contract and seek competent legal advice.
Note, a contract to purchase real estate must be in writing to be enforceable by a court. Oral agreements to purchase real property are not binding.
Doesn't the selling broker represent me as a buyer?
No. All brokers represent the seller unless they specifically are engaged as a ""buyer's broker.'' You should have received a notice explaining this when you first began dealing with the broker in question.
Seller: Why can't I take the chandelier and built-in bookcases?
They are fixtures and attached to the property. If you wish to take them, they must be deleted from the purchase and sale agreement's description of the premises to be sold, and any structural changes made must be remedied (i.e., the light fixture must be replaced with another, and the wall behind the bookcases repaired).
Why can't we move in early/stay on after the closing?
Because you do not own it yet/any more. If coordinating moving dates is a real problem, we can try to arrange for a use and occupancy agreement--but it should be in writing and address issues such as responsibility to insure, assumption of liability, possibility of damage to the property and a contingency in the event that the owner has to evict in order to regain possession.
Who gets the interest on the deposit?
While both parties feel the money is theirs pending the closing, we suggest that the parties split the interest, if any, in half. (Note, escrow accounts may be interest bearing or non-interest bearing). Absent any agreement to the contrary, Practice Standard No. 9 of the Massachusetts Conveyancers Association states that ""interest earned on deposits for real estate shall be paid to the buyer.""
What will our closing costs be?
It depends on the loan program offered by the lender. At a minimum, you should expect to pay one or two points; an application/credit report/appraisal fee of approximately $400, some of which may be prepaid; one year's mortgage insurance (if applicable); and interest in advance for the balance of the month in which you close. In addition, the lender will collect the prepaid escrows for taxes (which when ""netted out'' against the tax adjustments will equal about three months' worth), hazard insurance (usually for two months, based on the actual premium) and mortgage insurance if applicable (for two months, based on the actual premium). Depending on the lender and the program, there may also be charges for document preparation (usually $100), a tax service fee (usually $85), deliveries ($25-$30) and transfer of serving charges ($10--assignment; $5-certified copies). The bank attorney will collect and disburse for recording fees ($59); title abstract ($150); municipal lien certificate ($25); plot plan ($150); title insurance; and his or her fee.
Note: All costs listed above are approximate.
Why should I buy an owner's title insurance policy?
Similar to a homeowner's insurance policy which protects the actual physical dwelling, the title to your property should also be protected. Title insurance protects the policy holder from losses that may occur from various defects in title. It helps to provide you with peace of mind and takes the risk out of acquiring property. Although the attorney conducting your closing will certify the quality of the title, there can still be costly unknowns that can wreak havoc with your biggest investment.
Although the property may be new to you, and you may have even bought a newly- constructed home, title to the land has most likely been transferred many times prior to your purchase. Most residential transactions occur between private individuals, but it is not uncommon for property to be acquired through inheritance, foreclosure or bankruptcy. During any type of transfer, errors could have arisen which may cause a "cloud" (a problem) in your title. If you purchase the property without the protection of title insurance, this type of issue could lead to a costly expenditure by you to defend your title or even worse, it could lead to the loss of your property and the money that you paid for its acquisition.
An owner's policy insures you against possible title claims against your property, and provides you with immediate and expert legal support. Keep in mind that the lender's policy required to be purchased by the bank at closing protects the lender for the amount of its loan, but it does not protect the homeowner. For a one time cost, you can have peace of mind knowing you are protected from title defects such as forged documents, undisclosed or missing heirs, unknown creditors, misfiled rights or easements or mistakes in recording at the Registry of Deeds. In short, an owner's policy provides you protection against title defects that existed at any time prior to the purchase of your property. Additionally, the title companies for whom Hamilton & Hamilton, P.C. is an agent now offer enhanced policies that protect the homeowner against defects that arise even after the property is purchased.
What are ""points""?
Points are fees charged to bank customers for the use of money. Although charged in many kinds of loan transactions, they are most commonly thought of in connection with residential lending. A point is calculated at one percent of the loan amount; thus, on a $160,000 loan to purchase a $200,000 house, one point would equal $1,600; one and a half points would equal $2,400; and two points would equal $3,200.
Why do I need you as my own attorney when the bank will have one and I have to pay for him or her anyway?
Because the bank attorney represents only the bank, and you pay him or her for that purpose only. No matter how good a lawyer he or she is, the bank's attorney does not care about the terms of your purchase and sale agreement. Your own attorney will be concerned with all these matters and will also represent your interest if it should differ from the bank's (for instance, if the loan terms change from those in the commitment letter to the loan documents at the closing).
