When buying a home, the process can be incredibly stressful, especially if you’re not familiar with all of the steps involved in the transaction. Understanding how it affects your home purchase will help you minimize stress and stay on top of your real estate transaction during the home-buying process. Here are some tips to help you avoid potential issues when buying a home.
Know the Difference Between Escrow and Impound
Both terms refer to an account used during real estate transactions. An escrow is an account that holds the money until some condition is met, and impound refers to withholding of funds until people have completed their task. If you’re closing on a home purchase, it’s essential to understand both terms to avoid any confusion or problems with your closing documents.
Know Your Closing Costs
Before you sign on that dotted line, get to know all of your closing costs. These include title search and attorney fees, property taxes, mortgage insurance (MI), state transfer tax, and miscellaneous closing costs. You may even have some prepaid expenses in your budgets, such as homeowners insurance premiums and property improvements. Don’t forget to factor those into your total closing costs as well.
Know What Fees Are Negotiable
As you shop around, it’s essential to know whether or not fees are negotiable. Be sure to factor in everything — and don’t forget about taxes and homeowner’s insurance — when comparing loan offers. You can ask your loan officer which fees are negotiable and which aren’t. Are there extenuating circumstances? Specific customers who have a good credit score might receive more favorable terms than someone with less stellar credit.
Understand Your Timeline
If you are purchasing a home, you should consult with lenders to understand what type of timeline they require and work with them on following that timeline. You will also need to give your broker adequate time to conduct due diligence on your behalf. Depending on how much information you provide about your income, assets, employment, and other factors, it could take 2-4 weeks before all parties are ready to move forward.
Understand What Is Involved
The purpose of the account is to protect all parties involved in a transaction. The buyer, seller, and real estate broker each deposit funds into an account, which serves as collateral for any outstanding debts related to the marketing. For example, if during closing it is discovered that repairs or other costs remain at either location from which you’re buying or selling your home—or if there are undisclosed liens on your house—your funds are used to cover these costs.
Real Estate Attorneys in South Florida
As excellent real estate attorneys, we have worked with escrow officers before and know how to communicate effectively to ensure that everything goes smoothly. Expert Title in South Florida will also take advantage of our prior relationships with escrow officers by referring clients when appropriate to protect you and your investment. Contact us to learn more.