Home Closing 101

For first time home-buyers, the "closing" is sometimes an overwhelming flurry of lawyers, Realtors and paperwork. Many homebuyers really do not understand all of the details, and the complex issues can be confusing at best and can have major long-term ramifications.

Here are some details for first time homeowners about your closing:

WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?
It will take a mortgage lender 1-6 weeks to complete the evaluation of your application--and more and more often, they are asking for additional information. The faster you can provide that information, the faster your application will be processed. After the lender is satified with what you've provided, your information will be verified and the lender will make a decision on if you will be given a loan. They will let you know if you are an approved and if that is the case, a closing date will be set. After closing, you'll be able to move into your new home.

WHAT SHOULD I LOOK OUT FOR DURING THE FINAL WALK-THROUGH?
The walk-through is the last chance for you to walk through the house after it has been emptied. You will get a clear view of the walls and ceilings, and the opportunity to see any work the seller agreed to do in response to the inspection. If you notice any problems, you should bring them up prior to closing. It is the seller's responsibility to fix them.

WHAT MAKES UP CLOSING COST?
Closing costs are usually made up of the following:

-->Attorney's or escrow fees (Yours and your lender's if applicable)
-->Property taxes (to cover tax period to date)
-->Interest (paid from date of closing to 30 days before first monthly payment)
-->Loan Origination fee (covers lenders administrative cost)
-->Recording fees
-->Survey fee
-->First premium of mortgage Insurance (if applicable)
-->Title Insurance (yours and lender's)
-->Loan discount points
-->First payment to escrow account for future real estate taxes and insurance
-->Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
-->Any documentation preparation fees

WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?
On your closing day, you will present your paid homeowner's insurance policy (or a binder) and receipt showing that the premium has been paid. The closing agent will then present a list of the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspections, required repairs and warranties.

You will be presented with all of the documentation and it will be explained to you. Once you're sure you understand each piece, you will sign the mortgage, agree that if you don't make payments the lender is entitled to sell your property (and apply the sale price against the amount you owe plus expenses). You will also sign a mortgage note, promising to repay the loan. The seller (or his agent) will give you the title to the house in the form of a signed deed.

You will pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds.

Now you are a homeowner!

WHAT DO I GET AT CLOSING?
At the closing, you will get a:

-->Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)
-->Truth-in-Lending Statement
-->Mortgage Note
-->Mortgage or Deed of Trust
-->Binding Sales Contract (prepared by the seller; your lawyer should review it)
-->Keys to your new home

If you would like more information about the Mint Hill, Matthews and Charlotte area real estate market? Call me: Rich Ferretti, When YOU are ready! 704-564-0807
Check out www.minthillrealty.com

Sellers: How to capitalize on the $8,000 tax credit

Time to capitalize on the federal tax credit of up to $8,000 for first time buyers is running out. As is the opportunity for home sellers to benefit from this incentive as well.

"If you have a home on the market, getting as many of the "first-time" buyers in as possible right now is even more important than usual," says Rich Ferretti of Jamison Realty, "the typical first-time home-buyer really wants to be able to cash in on the credit, and so they are in a buying mood. And time is running out"

For the first-time home buyer, it is easier to imagine themselves living in a clean, well-cared for, and functional space. As a seller, you can make your home more inviting to buyers by making sure the home-improvement projects are done. Your home will show better and bring in offers faster if it is "move-in ready".

Here are some ways to make your home sell fast to those first-time buyers:


1. Maintain and Stage. A fresh coat of paint and a serious look at decluttering will go a long way, but don't overlook what a professional Home Stager can do for you. Staging professionals boast that the cost of staging will always be less than the first price decrease--so it pays for itself! This will help make the house feel like a home to anyone who comes to see it!

2. Offer to Help Pay Closing Costs. First time buyers especially may need help with points or closing costs. if you can help with this, you will attract many more potential buyers, and may be able to close the one the counts!

3. Offer a Home Warranty. First-time buyers will consider it a huge selling point if you stand behind the house's integrity and that of the major working parts (roof, water heater, AC). You can offer a warranty that will take care of any needed repairs of the major items. Work through your agent to get this on paper, and the message to potential buyers.

4. Offer Mortgage Protection. Mortgage protection covers several months of mortgage payments in the event that the buyer becomes unemployed. This insurance is a great option for most buyers, and first-time buyers may feel especially inclined to choose a home that offers it.

5. Low Offers Aren't Always Bad. Just because an offer is WAY below what you would reasonably take, doesn't mean you shouldn't at least counter. The market is at a place now where buyers feel that they have the upper hand, and are being very aggressive looking for bargains. If you get a super low offer, don't dismiss them immediately, counter with an appropriate number. If they walk away, that is fine, but if they really want the home, you will see them again. Work with your Buyer's Agent to price the home right in the first place, and then to navigate the offers when they come in.




Want more information about the Mint Hill, Matthews and Charlotte area real estate market?
Check out www.minthillrealty.com