Sherrard Law Group

A Beginner’s Guide to Buying a Home in Florida (Part 7).

Part 7 –  The Closing

Buying a home is one of the most important decisions in a person’s life. As we discussed last month, in Part 6 of our Beginner’s Guide to Buying a Home in Florida, Buyer Requests, Repairs, and Pre-Closing Inspection, even for the most experienced sellers/buyers, closing on a home in Florida can become an intimidating challenge. This series is written to assist you in understanding the basics of real estate transactions in Florida.

The Closing

After the closing documents have been prepared, reviewed and approved, the parties will schedule a date, time, and location for closing the transaction. On the agreed upon date, the closing attorney and his staff will be responsible for conducting the closing, answering any questions that the buyer and seller may have, collecting all funds necessary, obtaining the required signatures for each document and disbursing the funds after all elements of closing have been completed. The seller will endorse the deed, the closing statement and other seller documents, while the buyer will sign the loan documents, the closing statement and all other buyer documents. An additional service that an attorney as closing agent offers is serving as an escrow agent, if funds must be withheld until repairs are completed after closing. Our office prepares the escrow agreement and holds funds in trust until all repairs are completed and conditions of the escrow agreement are met.

When the signing of all documents is finished, the attorneys, Realtors, and other parties involved in the transaction are paid the sums set forth in the closing statement and the parties go on their separate ways. After the closing is complete, all mortgages, liens, and vendors are paid in full and all documents to be recorded are sent to the clerk’s office for recording, after which the title policy(ies) will be prepared and sent to the buyer and/or the lender.

Whether you are buying or selling real property, you should have a skilled attorney working with you throughout the process. While a real estate agent or Realtor can answer certain questions that you may have regarding the property, only an attorney can provide you with answers to legal issues regarding the purchase and sale of real property. In most cases, using the services of an attorney as a closing agent will be more valuable and cost you no more than engaging a title company to perform the title and closing services. That is why we invite you to contact the Sherrard Law Group today to speak to a member of our legal team and engage our services in your real estate transactions. We look forward to serving as your trusted legal representatives and closing agents.

Part 6 –  Buyer Requests, Repairs, and Pre-Closing Inspection

Buying a home is one of the most important decisions in a person’s life. As we discussed last month, in Part 5 of our Beginner’s Guide to Buying a Home in Florida, Processing the Contract for Closing and Preparation of Closing Documents, even for the most experienced sellers/buyers, closing on a home in Florida can become an intimidating challenge. This series is written to assist you in understanding the basics of real estate transactions in Florida.

Buyer Requests, Repairs, and Pre-Closing Inspection

The pre-closing inspection, often referred to as “the final walk-through” is a significant step in the buying process. The pre-closing home inspection is the buyer’s opportunity to ensure that the home that they are buying is in the same condition it was in when the home was first inspected. Usually, after the initial inspection is performed, the potential buyer requests the seller cure any defects to the home discovered by the inspector during the inspection process. Anything that would have a significant negative impact on the value of the property should make the home inspection repair request list. If the contract is an “as is” contract, the seller is not required to make repairs discovered by the initial inspection. Nevertheless, the seller is required to keep the property in the same condition at the time of the signing of the contract. If the seller was required to perform any work on the home or if the seller was just required to maintain the condition of the home until closing, it is vital for the buyer to perform a thorough pre-closing inspection to verify the condition of the property. If the repairs were not properly completed or the condition of the home was not maintained, then the buyer must insist on compliance AT OR BEFORE the closing is completed. Otherwise, the buyer will take the property in its current condition and the seller will have no further obligation to repair or restore the property. The pre-closing inspection ordinarily takes place right before the closing (usually within 24 hours). Because of this, many buyers are anxious and excited and may fail to perform a detailed inspection. This can be a very costly mistake. Remember to slow down, keep a cool head, and give the home a methodical pre-closing inspection, and provide the list of defects or unfinished repairs to the seller or the listing broker/agent immediately after the walkthrough, so that they can be completed before closing or dealt with at the closing table. 

No matter if you’re buying or selling a home in Florida, you should have a skilled representative working with you throughout the process. While an agent or realtor can answer certain questions you may have, only an attorney will act in your best interests and is often less expensive than people think. In fact, in most instances having a real estate lawyer close your transaction will cost no more than a title company will charge to conduct the closing. That is why we invite you to contact the Sherrard Law Group today to speak to a member of our legal team about your real estate transaction. We look forward to serving as your trusted legal representatives.

Next week – Part 7…The Closing

Part 5 –  Processing the Contract for Closing and Preparation of Closing Documents

Buying a home is one of the most important decisions in a person’s life. As we discussed last month, in Part 4 of our Beginner’s Guide to Buying a Home in Florida, Title Insurance, even for the most experienced sellers/buyers, closing on a home in Florida can become an intimidating challenge. This series is written to assist you in understanding the basics of real estate transactions in Florida.

Processing the Contract for Closing

In addition to the closing attorney or his staff ordering title insurance under the terms of the contract, there will be other items that need to be ordered or tasks to be accomplished. The processing stage includes the Sherrard Law Group attorneys and staff gathering ad valorem tax information, ordering loan payoff statements, ordering a survey, ordering an appraisal, obtaining homeowner or condominium association estoppel letters showing maintenance fees, ordering a permit and lien search, ordering inspection and waste management reports and gathering all of the information on sums to be prorated and paid at closing. This will entail contacting the parties, the lender’s agents, the brokers, the inspector, the appraiser and all lienholders in order to have all items ready to prepare the closing documents.

Preparation of Closing Documents

When all of the preliminary documents have been received, reviewed and approved by the parties, the closing attorney and staff will prepare all of the documents necessary to close on the sale. The contract provides a deadline for closing, but closing can take place before that date if all parties agree. If the deadline cannot be met due to delays of lenders or document providers, a written  extension must be obtained and signed by the seller and buyer as soon as the parties are aware that an extension is needed, or else either party can cancel the contract and a dispute over the deposit or other damages may arise. The closing documents usually include the deed to the property, a bill of sale for personal property, the loan documents, necessary affidavits and the closing statement. If a mortgage lender is involved, the lender will provide closing instructions to the closing attorney, and the closing attorney will be required to follow the instructions explicitly in order to “close the loan”. All of the charges and prorations required by the lender will be set forth in the closing statement, along with the standard fees and expenses for the sale from seller to buyer. The attorneys and staff at the Sherrard Law Group work tirelessly to meet all deadlines in the contract and prepare all documentation necessary to consummate the sale and purchase in a professional and timely manner.

No matter if you’re buying or selling a home in Florida, you should have a skilled representative working with you throughout the process. While an agent or realtor can answer certain questions you may have, only an attorney will act in your best interests and is often less expensive than people think. In fact, in most instances having a real estate lawyer close your transaction will cost no more than a title company will charge to conduct the closing. That is why we invite you to contact the Sherrard Law Group today to speak to a member of our legal team about your real estate transaction. We look forward to serving as your trusted legal representatives.

Next week – Part 6…Buyer Requests, Repairs, and Pre-Closing Inspection

Part 4 – Title Insurance

Buying a home is one of the most important decisions in a person’s life. As we discussed last week, in Part 3 of our Beginner’s Guide to Buying a Home in Florida, Inspections, even for the most experienced sellers/buyers, closing on a home in Florida can become an intimidating challenge. This series is written to assist you in understanding the basics of real estate transactions in Florida.

Title Insurance

It is now customary, when buying a home, for the title to real property to be insured in order to protect the buyer from any prior mortgages, liens or claims by third parties that they have an interest in the property under contract. The contract has a provision for title insurance and give an option to determine which party will bear the cost. After the contract is signed by all parties, a title insurance commitment will be ordered by the party responsible to pay for the policy or his/her attorney. The title commitment will be prepared by a title insurance company, such as Chicago Title Insurance, and the commitment will show all of the requirements to close on the sale, as well as the exceptions to the title, such as easements for utilities and drainage. It is critical for the buyer or his/her attorney to review the commitment as soon as it is received to determine if there are any major issues (“title defects”) and/or requirements to be cured in order to obtain clear title to the property. If there are issues to be resolved, the buyer must give the seller written notice, setting forth each issue, and the seller is responsible to “cure” the title by resolving those issues. If the buyer fails to review and notify the seller of the issues within the deadline (which is usually five days after buyer receives the commitment), the only options left to the buyer are to take title to the property subject to the title defect or to default on the contract, lose the deposit or be subject to a lawsuit. If the buyer notifies the seller of title defects, the seller will have a time deadline to cure those defects, failing which, the buyer can opt to cancel the contract and receive a refund of the deposit or proceed to closing and take title subject to the uncured defect. If the contract proceeds to closing, the closing agent will be required to meet every requirement listed in the commitment at or before the closing.

There is title insurance available for buyers (an Owner’s Policy) and lenders (a Lender’s Policy). The Owner’s Policy is optional, but, for many home buyers, purchasing an owner’s title insurance policy is a matter of being safe rather than sorry. Virtually every institutional lender will require the buyer to provide and pay for a lender’s title insurance policy at the closing. The amount of the insurance coverage for the Owner’s Policy will typically be the purchase price in the contract, and the coverage for a lender’s policy will be the amount of funds loaned to the buyer by the lender.  If a party challenges your title at any time after the closing, while you are the record title owner, the title insurance underwriter will defend your title against the claim and pay any and all related loss, up to the limits of the amount of insurance in the policy. The lender’s policy indemnifies the lender’s interest in the title to your property, and the underwriter will pay for the defense in any lawsuit and pay for any damages to the lender, due to a title defect, up to the amount of the original loan value.

No matter if you’re buying or selling a home in Florida, you should have a skilled representative working with you throughout the process. While an agent or realtor can answer certain questions you may have, only an attorney will act in your best interests and is often less expensive than people think. In fact, in most instances having a real estate lawyer close your transaction will cost no more than a title company will charge to conduct the closing. That is why we invite you to contact the Sherrard Law Group today to speak to a member of our legal team about your real estate transaction. We look forward to serving as your trusted legal representatives.

Next week – Part 5…Processing the Contract for Closing and Preparation of Closing Documents

Part 2 – Obtaining a Mortgage and Home Appraisal

Buying a home is one of the most important decisions in a person’s life. As we discussed last week, in Part 1 of our Beginner’s Guide to Buying a Home in Florida, the Contract and Depositing Earnest Money, even for the most experienced sellers/buyers, closing on a home in Florida can become an intimidating challenge. This series is written to assist you in understanding the basics of real estate transactions in Florida.

Obtaining a Mortgage

In many real estate transactions, the buyer will require a loan in order to finance the purchase of the property. The seller may be willing to hold a note and mortgage or the buyer will need to obtain a loan from a private or institutional lender to provide funding to enable the buyer to purchase the property. Once the buyer has selected the lender, the buyer will be required to apply for a “mortgage loan”. A mortgage is a loan from a bank or other institutional lender that enables a buyer to obtain sufficient funds to purchase the property. The collateral for the mortgage is the property itself, meaning that if the buyer does not comply with making timely payments or other the terms of the mortgage, then the lender can declare a default and foreclose on the property requiring the property to be sold in order for the lender to recover the moneys due to the lender. A buyer should be aware that it is helpful to a buyer in making an offer to purchase property to have pre-approval for a loan in order to show the seller that the buyer is able to complete the purchase. So, a wise buyer will search for the lender before making an offer to purchase property in order to obtain a pre-approval document, showing the seller that the buyer can readily secure the required loan and move quickly to the closing. As part of the lending process, the property will need to be appraised to show that it is worth the value shown in the contract, and the lender will require proof that the title and the property is insurable. The attorneys and staff at the Sherrard Law Group have assisted buyers for forty-seven years in finalizing their loans and closing on the purchase of their desired property.

Home Appraisal

A licensed appraiser, selected by the buyer’s lender, will conduct the appraisal on the subject property. The appraiser will visit the property and investigate the condition, square footage and location of the property. Off-site, the appraiser will also evaluate the current real estate market in the neighborhood in order to estimate the fair market value of the property. The value in the appraisal will be relied upon by the lender to determine if the property value is sufficient to warrant to loan value. If the purchase price is more than the value shown in the appraisal, the lender may refuse to make the loan, and the buyer may be required to negotiate a reduction in the price from the seller or cancel the purchase contract.

No matter if you’re buying or selling a home in Florida, you should have a skilled representative working with you throughout the process. While an agent or realtor can answer certain questions you may have, only an attorney will act in your best interests and is often less expensive than people think. In fact, in most instances having a real estate lawyer close your transaction will cost no more than a title company will charge to conduct the closing. That is why we invite you to contact the Sherrard Law Group today to speak to a member of our legal team about your real estate transaction. We look forward to serving as your trusted legal representatives.

Next week – Part 3…Inspections

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