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FREQUENTLY ASKED QUESTIONS
WE
JUST SIGNED AN OFFER; WHEN CAN THE MOVERS COME?
DOESN'T
THE SELLING BROKER REPRESENT ME AS A BUYER?
WHY
CAN'T I TAKE THE CHANDELIER AND BUILT-IN BOOKCASES?
WHY
CAN'T WE MOVE IN EARLY/STAY ON AFTER THE CLOSING?
WHO
GETS THE INTEREST ON THE DEPOSIT?
WHAT
WILL OUR CLOSING COSTS BE?
WHAT
IS TITLE INSURANCE AND DO I NEED IT?
WHAT
ARE "POINTS"?
WE
JUST SIGNED AN OFFER; WHEN CAN THE MOVERS COME?
Generally when the buyer is getting
an institutional first mortgage, the closing process should take eight
to ten weeks (assuming there are no title problems). I would advise
holding off on booking the movers for now, however, and wait to see if
your transaction is indeed an average deal. The movers probably will
not need much lead time, and you do not want to commit to a date you
cannot honor.
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DOESN'T
THE SELLING BROKER REPRESENT ME AS A BUYER?
No. All brokers represent the seller
unless they specifically are engaged as a "buyer's broker." You should
have received a notice explaining this when you first began dealing
with the broker in question.
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WHY
CAN'T I TAKE THE CHANDELIER AND BUILT-IN BOOKCASES?
They are fixtures and attached to
the property in such a way as to make their removal impossible without
altering the property. If you wish to take them, they must be deleted
from the purchase and sale agreement's description of the premises to
be sold, and any structural changes made must be remedied (i.e., the
light fixture must be replaced with another, and the wall behind the
bookcases repaired).
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WHY
CAN'T WE MOVE IN EARLY/STAY ON AFTER THE CLOSING? Because you do
not own it yet/any more. If coordinating moving dates is a real
problem, we can try to arrange for a use and occupancy agreement--but
it should be in writing and address issues such as responsibility to
insure, assumption of liability, possibility of damage to the property
and a contingency in the event that the owner has to evict in order to
regain possession. Top
WHO
GETS THE INTEREST ON THE DEPOSIT?
That is a matter for negotiation at
the purchase and sale agreement stage. While both parties feel the
money is theirs pending the closing (and both have good arguments to
support such statements: the seller's being that the money is part of
the purchase price and is held in escrow only as a matter of custom;
the buyer's being that the money is held in escrow until the seller
performs by delivering a deed), I suggest that we split the interest in
half. (Considering the attorneys' hourly rate, why waste time haggling
over a small percent return?)
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WHAT
WILL OUR CLOSING COSTS BE?
It depends on the loan program
offered by the lender. Even if you choose a no-point program, you will
pay various fees including an application/credit report/appraisal fee
of approximately $300, some of which may be prepaid; one year's
mortgage insurance (if applicable); and interest in advance for the
balance of the month is which you close. In addition, the lender will
collect the prepaid escrows for taxes (which when "netted out" against
the tax adjustments will equal about three months' worth), hazard
insurance (usually for two months, based on the actual premium) and
mortgage insurance if applicable (for two months, based on the actual
premium). Depending on the lender and the program, there may also be
charges for document preparation (usually $150-$300), a tax service fee
(usually $70-$100), courier fees ($25-$30) and various miscellaneous
charges ($10--assignment; $5--certified copies).
The bank attorney will collect and
disburse for recording fees ($59); title abstract ($150); municipal
lien certificate ($25); plot plan ($125-$150); title insurance; and his
or her fee.
Note: All costs listed
above are approximate. Top
WHAT
IS TITLE INSURANCE AND DO I NEED IT?
It is a policy of insurance that
protects the lender and, if purchased by the buyer, the owner of the
property from claims against the title to the real estate. While
attorneys must certify to buyers that the title to the property is good
(if such certification is made to the lender), the owner will not be
able to collect on such a certification if the attorney is gone or if
the problem is one for which the attorney would be liable, such as a
forged document in the chain of title. In such an instance, the
insurance policy would cover where the attorney would not. Top
WHAT
ARE "POINTS"?
Points are fees charged to bank
customers for the use of money. Although charged in may kinds of loan
transactions, they are most commonly thought of in connection with
residential lending (that is also the only loan in which the amount of
the fee is regulated by state law: they are capped at one percent if
the loan is not to be sold in the secondary market and at two percent
if the loan is intended for sale). A point is calculated at one percent
of the loan amount; thus, on a $160,000 loan to purchase a $200,000
house, one point would equal $1,600; one and a half points would equal
$2,400; and two points would equal $3,200. You may choose a "no-point"
loan but the rate will be higher than a loan in which you pay points. Top
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