Part 7 - The closing .... and beyond
Recently, I had the pleasure of doing an adult ed. home buyers class for the Marietta Community School. I have decided to take some of my outline notes and form the into a blog series for home buyers.
The content is geared a little more toward first time buyers but will still be very relevant for move up buyers as well. Also, this is based on my own knowledge and experience in our local market. All real estate is local, so if you are reading this in another part of the country then some of the ideas may not apply or at least they may apply differently.
The closing ... and beyond
You are almost a homeowner! At this point you have been out looking at what seems like 1000s of houses, had lenders look at every aspect of your life (hopefully you still have the rights to your first born child LOL), survived home inspections, appraisals, packing your previous home, stressful negotiations, and much more.
Today is the day that you show up for the big event know as a closing. Whats going to happen and what the heck is going on?
- In Georgia all closings are handled by attorneys. That attorney represents the lender if you are obtaining a mortgage. Regardless of who picked the attorney they will represent the lender. If you are paying cash the Georgia contract allows you to specify as a part of the offer who the closing attorney will represent. You are always welcome to have your own attorney review the documents prior to closing. If you are obtaining a standard type mortgage and there is nothing unusual about the purchase then most of the documents will be fairly "boilerplate". Very few people seem to opt to have the docs reviewed by their own counsel. Your agent will almost certainly be there as well and they will be glad to answer some of the questions that you may have, but remember they are not an attorney and don t offer legal advice. The closing attorney will also be willing to answer questions if you have them.
The attorneys assumption will be that if you show up that you are ready to sign. Do not expect to be able to thoroughly read every document! The attorney will give you a very brief description of each document.
- About the documents - Trees are going to die! You will never see such a large stack of papers. What the heck do they all say? Well a few of them will simply be to convey ownership from the seller to you. There will be documents saying that the home is collateral for the loan and a promissory note saying how much the payments are and when they are due. A whole bunch of the other documents will be from the lender and will be required to obtain the mortgage. I'm not trying to belittle the process or importance of these documents but basically here is what they say. - If you don't pay you don't stay!
- Home owners insurance. In most cases the fists years homeowners insurance will be paid at closing and the attorney will send the check to your insurance agent. Hint: Use your home purchase as an opportunity to shop around for insurance. If this is your first home you will be happy to learn that most insurance companies will you give you a discount for having your cars and home both insured with them. Shop around for the best policy. The cost of the homeowners policy will be listed as a prepaid item on your closing statement. If you negotiated for the seller to pay closing costs this could be covered as a part of that.
- The numbers. There are a few forms that you will see that are all about the numbers. The primary one will be the HUD1 or closing statement. This will itemize the price, down payment, every closing cost and fee, and the exact amount due to or from both the buyer and seller.
After the closing - Congratulations you are now officially a home owner! Along with home ownership comes many rights and responsibilities. If you haven't read part 1 of this series yet then go back and read that one. There are many benefits to home ownership other than the idea that it may go up in value.
- If the market shifts and you see a short term drop in value (like today's market) your next payment is still due the 1st of next month
- If the water breaks call a plumber and expect to pay the bill. Your next payment is still due the 1st of next month.
- If the house burns down (hopefully you wont be home) call your insurance agent. They should be able to provide temporary living quarters for you. Your next house payment is still due the 1st of next month.
- Lost your job? Your next payment is still due the 1st of next month.
You get the idea. The bank wants the money that you agreed to pay. If you don t pay, you don't stay.
Get to know the folks at Home Depot! You will be making many trips there :-). Seriously, don't be afraid to try a few repairs on your own. For me, every new "HoneyDo" project is an excuse to buy new power tools!
I want to conclude by going back to a point that I mentioned a moment ago. I mentioned in Part 1 that there are many reasons to own a home. This is your own space, you own it! There has never been a 10 year period that homes values have declined. I don't believe that right now is any different. In case you haven't heard, real estate is on sale now! If you are ready to enjoy the long term benefits (and you do need to look at the long term) then now is a great time to buy.
I have had clients that have called me that weren't ready to buy and then called me back 1 or 2 years later! No pressure or hype from me. I expect your business the old fashioned way ... I earn it. So whether you are thinking of buying this weekend or the next couple of years or you just don't know ... give me a call. I'm always glad to help!
Read Part 1, Here - Is it a good time to buy and should I buy?
Read Part 2, Here - Should you buy a home if you currently have a home to sell?
Read part 3, Here - Getting Credit Ready/ How much house can I afford?
Read Part 6, Here - Appraisal, Inspection, and Due Diligence
Read Part 7, Here - To the closing and beyond
Stay tuned for the next series! For sale by Owner / Selling a home in today's market
Bob Southard, e-Pro, Realtor ®, Solid Source Realty, Inc. Buy a home, Sell a home, in Powder Springs, Marietta, Kennesaw, Acworth, Dallas, Hiram,and Cobb, Paulding, Douglas, North Fulton, South Cherokee, County, Ga
Visit my website www.AgentBobSells.com
Call me for all of your Real Estate needs
Copyright © 2008 By Bob Southard, All Rights Reserved