Buyer's Guide
You and the Seller Must Agree
Buying a home does not occur in a vacuum, involving only
you and the seller. There are all kinds of people and
services involved behind the scenes to make it happen.
Since some of these services affect both you and the
seller, there will have to be an agreement on which
companies you will use for them. When you make your
offer, you should request your favorites for these
services. If you are unfamiliar with these service
providers, you can get recommendations from your agent.
Escrow and Settlement
For example, you are going to need an escrow or
settlement company to act as an "independent third
party" between you and the seller. Without having a
third party involved, how do you know that when you fork
over the money, you are going to get the deed? This is
the type of service provided by escrow and settlement.
They will hold your deposit and coordinate much of the
activity that goes on during the escrow period.
Since this third party is very important to both you
and the seller and both of you will pay fees to this
company, it is important to agree on which service to
use. Therefore, your choice should be part of the offer.
Since you do not buy a home every other week or so, you
are probably unfamiliar with companies that provide this
service. Your agent will make a recommendation. You have
the authority to accept this recommendation and include
it in your offer, or make your own choice.
Keep in mind that the seller will also have a
preference and this may be a point of negotiation in a
counter-offer. It has become customary that one side
will choose the escrow/settlement agent and one side
chooses the title insurance company. Even so, everything
in real estate is negotiable.
Title Insurance
Title insurance is important because, by providing you
with an Owners Policy, they insure that you have clear
title to the property. If there are any problems later,
you can always go back to the title insurance company
and have them clear it up. Since it is customary for the
seller to pay for the owner’s policy, they have an
interest in which company is used.
However, you are going to pay a fee to the title
insurance company, too. This is for the Lender’s Policy.
The lender’s policy insures your mortgage lender that
there are no liens or judgments against the property and
that the mortgage will be in first position. In other
words, should you sell the property or refinance it,
their mortgage gets paid first, before any other claims
against the property.
The lender’s policy is less expensive than the
owner’s policy.
Termite and Pest Inspection
As part of your offer, you may require a termite and
pest inspection. This company not only inspects for
termite damage and pest infestations, but also inspects
for dry rot and water damage, among other things. The
company that performs the inspection is important to you
as a buyer, because you want to be sure they do a good
job. It is important to the seller because it is
customary that they pay for the inspection and some
types of repairs that may be required.
You should determine which company you want to
perform this inspection and make it a part of your
offer. Otherwise the seller will choose. If you do not
know which company to hire, your agent will make a
recommendation.
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RealEstate ABC. No articles may be reprinted or
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