The Beginner’s Guide to the Homebuying Process
The Beginner’s Guide to the Homebuying Process
If you are buying a home for the first time, you may find the Homebuying Process daunting. A lot of paperwork, negotiation, and funds stand between you and your first home. Any issues that emerge along the way could delay the closing, end the transaction, or even lead to a legal dispute. Familiarize yourself with the basic steps of most closings and how the right legal team can help move things along.
Execute a real estate contract. Whether it is a standard form like the FAR/BAR “As Is” Contract, or a custom-made contract put together just for the transaction, the ideal contract will clearly cover all the terms and conditions of the transaction, as well as the duties and obligations of each party, such as who pays for title insurance, by what date you must conduct an inspection, and so on.
No matter how simple the transaction or its contract may seem, you should always have a legal professional thoroughly review every line of the contract, and if need be negotiate any differences or issues with the other party until you and the seller are ready to sign.
Deposit earnest money into escrow. Once the contract is signed and executed, you will be required to deposit “earnest money” – i.e., funds used to confirm a contract – into an escrow account. Marina Title offers escrow services that provide a secure and convenient way to deposit the funds.
Apply for a home loan. Like most home buyers, you will probably need a loan to cover some or all of the purchase price. Getting qualified for a home loan is a process in itself, usually requiring proof of income, a detailed loan application, and compliance with title insurance requirements (more on that later), to name but a few of the more common prerequisites. Fortunately, Marina Title real estate attorneys have experience helping buyers get qualified for the loan they need to close on their property purchase.
Get an appraisal. Usually undertaken by a certified appraiser, this step will determine the value of the property, which is often required by lenders in order to qualify for a loan.
Inspect the property. This is probably one of the most important steps in any transaction, since it ensures that your prospective home is worth purchasing. The contract will give a deadline by which to conduct an inspection and determine whether you want to proceed with the transaction or cancel without penalty. Even if you have agreed to buy the home “as is,” you should still examine the property for any potential issues. This can include anything from termites to structural problems or bad electrical wiring. While you can inspect the property yourself, a professional inspector is highly recommended to ensure a more thorough assessment.
Order a survey. Like an inspection, a survey will ensure that the property is being sold as represented. More importantly, it will also confirm that the boundaries of the property match what is recorded in the public records, so that there is no encroachment towards or by a neighboring property. Most lenders require a survey as well.
Have the title examined and insured. Another requirement for most lenders is a title examination, which verifies that the chain of title (i.e. the legal ownership) of the property runs clear to the current seller. Any missing or mistaken deeds, or existing judgements or liens, could leave you legally and financially liable when you take ownership. For the same reason, you should insure against any hidden title problems or claims to the property with a title insurance policy. Our title experts know how to conduct a meticulous title examination as well as draft an effective title insurance policy.
Obtain all the necessary insurance policies. These include wind, hazard, and flood insurance. In Florida, virtually all lenders will require you to have flood insurance if the property is in a coastal and/or low-lying area.
Execute the closing documents. Before you get the keys to your new home, you will need to sign several important “closing documents” that will complete the transaction. These include a Warranty Deed (which transfers title to you), Bill of Sale, Closing Affidavit, Closing Statement, and loan documents such as the Note and Mortgage. Once completed, these will be sent to the lender for approval, after which we will be authorized to close the transaction, transfer money from our escrow account, and give you the keys to your new home!
Work with Experts Who Know Florida Real Estate Closings
Marina Title has been involved in numerous successful closings. We have seen it all and can address almost any issue that may emerge during the course of your transaction. You can count on our experienced, adaptive, and multitalented team of real estate experts to help you navigate through even the most complex closings. To get started on your homebuying adventure, contact (800) 604-1871 or email info@marinatitle.com.
