Better Homes and Gardens Real Estate Life

Tag: Closing Tips

  • Your buyer asked you to pay closing costs. Now what?

    Say that you received an offer on your home, but your buyer is asking you to cover all the closing costs. What are your options in this type of situation? You generally have three choices: accept, reject, or respond with a counter offer. If you’re confident that you are in an accelerating market and that your home is in fact marketable, you could simply reject the offer and wait for a better one to come along. However, if you want to work with the buyer to reach a common goal, then you will need to write up a counter offer.

    Whether it’s accepting an offer or negotiating a home sale, your decision should not be reactive. In other words, you should think through your options thoroughly.

    Deciding to Accept or Decline an Offer

    For instance, before you decide to cover all the closing costs, you want to make sure that no other buyer will beat the offer. If you find that the offer is reasonable, then you can accept the terms with no changes. While closing costs can be considerable, they do not necessarily have to deter you from accepting an otherwise appealing offer. In other words, if the buyer is willing to accept your asking price that is substantially higher than what you paid for the home, covering the closing costs may still leave you with a nice profit and return on your investment. In such case, assuming there is no better offer, it might make sense to accept and sign the offer as is. Conversely, if you decide to decline the offer, then you want to make sure you have others lined up.

    Countering an Offer: Negotiating a Home Sale

    In terms of negotiating a home sale, there are a variety of factors to consider. For example, the condition of the market, your situation, and the property itself can all play a role in determining how much leverage you have. For example, if the buyer asks you to pay all the closing costs, then you have to ask yourself what kind of market you are in. If you’re in a buyer’s market with fierce competition, then you might have to concede to the terms of the buyer’s offer. However, if you are receiving multiple offers, then you could write a counter offer to pay some, but not all, of the closing costs. You could also agree to cover the costs with stipulations of your own.

    In any case, negotiating a home sale is by no means a simple task, so the expertise and insight that a real estate professional can provide is an invaluable resource. If you find that you are unsure of what to do after receiving an offer, it is helpful for you to consult with a seasoned real estate agent. For more information about negotiating a home sale, contact us today! One of our Better Homes and Gardens real estate agents will be more than happy to assist you with your home sale!

     

     

  • When to Set Your Closing Date

    The closing date is the end goal of any real estate transaction, but it is a day that needs to be  established at the start of purchasing a home. There tends to be confusion for homeowners regarding when to set the closing date. These tips will help you establish a deadline that is  beneficial for both you and the seller. You can also work with your real estate agent and real estate lawyer to help you choose the best date possible for all parties involved.

    Tips for Setting Your Closing Date

    • Provide at least 30 days from the time of the offer until the closing date. In general, most people set a closing date 30 to 45 days after the offer has been accepted. There are a few steps that need to occur between a final offer and the closing date. You must allow ample time for these steps.
    • Establish a date for the occupancy of your home as well. While the closing date is the day when ownership of the home is transferred from the sellers to the buyers, the actual moving day may occur at another time. Some home sellers can vacate the property prior to the closing, allowing the buyers to move in immediately after the closing is complete. However, others may need extended occupancy in the home — up to 60 or 90 days. In the case of extended occupancy, the previous owners must pay rent to the new owners of the home.
    • If you have a deadline that you must close by, you should set a closing date 10 to 14 days prior to that deadline. For example, if you need to be in your new residence by July 1st, you should set a closing date for no later than June 15.
    • The closing date may have to change throughout the process. Sometimes, the lender does not give final approval on the mortgage loan in time to close by the first date that was established. If this occurs, then the seller and buyer must agree to a new closing date. After the lender has given the buyer final approval, you can choose a firm closing date.
    • Set the closing date prior to the deadline for the lender’s loan commitment and make sure the closing is set in time to lock-in the established interest rate. If your closing date occurs too late, you may have to adjust the interest rate or seek approval on the loan again.

    Once you have a closing date set, circle the date on your calendar and be ready to celebrate. This date is when you are going to be a new homeowner. If you have cleared all hurdles to close and have achieved final approval on your loan, then let the countdown begin. It will not be long before you are settled in your new space, enjoying the home of your dreams.

  • Frequently Asked Questions About Closing

    The closing of a house is an important milestone for anyone, whether it is buying one’s first home or investing in a dream home for retirement. Here are a few of the frequently asked questions and answers about the closing of a home.

    What Happens Prior to the Closing of a Home?

    There are several steps that need to take place in any real estate transaction prior to a closing appointment. Only after the following steps are completed will the closing take place:

    • A purchase agreement needs to be finalized.
    • A home inspection needs to be approved.
    • An appraisal of your home needs to be completed.
    • The mortgage application is completed and approved.

    Which Party handles Title and Closing Costs?

    The responsibility for title and closing costs is negotiated as part of the real estate transaction. The responsibility will vary based on the individual sale. In most cases, the buyers and sellers will split the costs associated with the title and closing costs.

    What Do I Need to Bring to the Closing?

    • Identification will be needed at the closing: A government-issued identification card such as a driver’s license or a passport. In some cases, two different forms of identification are required.
    • Additional paperwork may be required at the closing, such as proof of homeowners insurance, the results of a home inspection and other legal documents needed for the transaction.
    • Your spouse should accompany you if you are married. A form of identification from your spouse will be needed.
    • A cashier’s check should be brought to the closing in the total amount of the down payment and closing costs. Your mortgage lender will provide you the final amount prior to the closing, allowing you to prepare the check from the bank.

    What Can I Expect at the Closing?

    Expect the closing to last for about an hour. The length of time the appointment will take may vary based on the complexity of the transaction and the availability of funds. Both parties will be required to sign off on several different documents during the appointment.

    The closing agent will be available to explain the details of all the documents you are signing and answer any questions.

    What Documents Are Signed at the Closing?

    You will be signing many different documents on the day of your closing, including:

    • Title Transfer: This document transfers the ownership of the home from the previous owners to you.
    • Truth-in-Lending Statement: This document details the fine print of your mortgage loan, and your mortgage company by law is required to provide you with it at the closing.
    • Title Insurance: Title insurance protects you as well as your lender from any issues regarding the title of your home.
    • Mortgage Loan Documents: These documents will finalize the approval of your loan and will give you the necessary financing to purchase it.

  • Home Sellers Checklist for Closing on a Home

    Selling your home can be a long and complicated process. If you have entered into an agreement for the sale of your home, you are almost to the finish line! The last step in the process should be closing on a home. This is where title to the home is legally transferred from the seller to the buyer. Although there will be some variance from one state to the next with regard to who is present at a closing and how the closing proceeds, there are some commonalities as well. As a rule, home sellers, home buyers, as well as their respective agents, must be present at the closing. In addition, a closing agent who works for the title company or lender is usually present along with a representative from the lender and the title company. Either or both side may also bring an attorney on the day of closing. In order to ensure that you are prepared for the big day, home sellers may wish to use the following checklist as a guide.

    • Request a payoff statement for each lien or encumbrance that currently exists on the property. If you have a mortgage on the property, contact your lender for the payoff statement. Other liens or encumbrances may turn up when the title search is conducted. These must be addressed prior to, or at, the closing. Your Better Homes and Gardens® Real Estate agent can assist you if you are uncertain how to request the necessary information.
    • Make any repairs that were agreed upon pursuant to the sales agreement. This should be completed prior to the final walk through by the home sellers.
    • Attend the walk-through before the closing. Most states allow/require a final walk-through within 24 hours prior to the closing. Although this is intended to be for the benefit of the buyer, you can take this opportunity to pass on any quirks or insider information regarding the home to the buyers. You will also want to be present in case any issues arise at the last minute with regard to the condition of the home or any repairs that have been completed.
    • Contact utility companies ahead of time to arrange for shut-off of services. If you have received a final bill prior to closing, bring that with you to show that you have turned off or transferred the services. On the day of closing, you should go through the house and physically shut-off valves.
    • Assemble warranties and manuals to pass on to the buyers. If the sale includes appliances or anything else that comes with a manual or warranty you should put those together to give to the new owners.
    • Bring your copies of all important documents to the closing. Although copies may be provided for you at the closing, it is best to come prepared. While there may be additional documents required at your specific closing, some common documents that you should have with you include: sales contract, title search, appraisal, inspection report, and disclosures.
    Because each closing is as unique as the property being sold, be sure to consult with your Better Homes and Gardens Real Estate agent to be certain that you are fully prepared for your closing when the day finally arrives.

  • Timeline for Closing on a House

    There are a few steps that you will need to navigate as you prepare and complete a closing on a new home. Below is a timeline you may want to consider so that you will be ready for the closing 30-45 days after your offer letter has been accepted.

    Negotiate the Offer

    Days 1 to 3: Once you make an offer on the home, the sellers review it and provide you with a counter-offer. Negotiations can take several days, and the final offer should establish the following:

    • What is included in the purchase
    • The closing date
    • The moving date

    Book a Home Inspection

    Day 4: After you have a signed final offer from the sellers, you should schedule a home inspection on the property you intend to purchase. An inspection is optional, but it is highly recommended. Through the process of an inspection you learn more about the home and it provides you with an opportunity to request that the seller make repairs if necessary.

     

    Finalize the Purchase Agreement

    Days 7 to 10: Now that you have had the inspection done and have consulted with the sellers, you can finalize the purchase agreement. The purchase agreement must be agreed upon by both the buyers and the sellers in order to move forward.

     

    Complete the Mortgage Application

    Day 14: It is time to make an appointment with your loan provider and finalize your mortgage application. Your loan officer will assist you with all the necessary paperwork to complete the application and will send it forward for final approval.

     

    Order an Appraisal

    Days 15 to 20: The mortgage company will need an appraisal done on the property to estimate its value. Once the appraisal is completed, the loan is one step closer to being approved. The mortgage company will review the results of the appraisal and determine if the loan is acceptable considering the value of the home. In some cases, additional paperwork is required. In most situations, the mortgage company can evaluate the appraisal and complete the loan application process within the time limits established in the purchase agreement.

     

    Receive Final Loan Approval

    Days 25 to 45: Your lender will give you a final loan approval, and you will be considered clear to close on your new property. Once you have received your final approval, all you have to do is to start the countdown until your closing date.

    Once you have the cleared any obstacles that might be in your way to close, all you have to do is wait for closing day. Your closing is typically 30-45 days after the offer has been accepted. It also depends on the deal that you negotiated with the sellers of the home. A closing day is a big event. Once all of the papers have been signed, and all the checks have been written, the house will be transferred into your name. You now are the proud owner of a new home that is all yours to enjoy!