Monday has rolled around today, and summer is fast approaching (WOW!).
On the topic of "Heat", one of the times we sweat to most is during Closing on a property. As on Ron J. Kuhn, a Sr. Mortgage Planner, says, "Closing" or settlement or "escrow" is listed as one of the top ten problem areas that occurs in a real estate transaction. It is probably the least understood, and most feared, aspect in a property purchase. Misunderstandings about closing costs can result in hundreds or even thousands of dollars of needless expenses, and put seemingly solid deals at risk". If that's not enough to make you sweat, let's examine this topic today.
"In general: The process is dependent upon conditions set by the lender", says Nigel Swaby of Primary Residential Mortgage, Inc.. Swaby says that the conditions are quite often set by the investor that will, "end up buying the loan on the secondary market.", and adds that With loan buybacks becoming more prevalent, "this is very, very important as no originator wants to buy back loans that can't be sold." Susan Anderson, a Broker with Inspired Real Estate, adds that, "The closing process is generally the same in any transaction, but there are some definite differences depending on whether the transaction involves a traditional sale, short sale, or REO (foreclosed property), as well as whether the(re) is financing involved or the purchase is all-cash."
As you can imagine, each state has their own unique process, and as Swaby says, "State law will impact the closing process.", and provides the state of Maryland as an example. "Maryland has transfer taxes that are levied on buyer and seller.", he says, but adds that the state specific requirements are "handled by the closing title or escrow company."
Anderson says that one thing that is unique in California is that, "in Northern California, the escrow and title are usually handled by the same company. In Southern California, they are often different companies. Also, the buyer gets to pick the escrow/title company and the offer negotiation determines who pays for it (usually 50/50)." She says that usually, the escrow officer is in the local community, but says that, "However, with an REO, the selling bank usually picks the escrow/title, but they also pay for it, saving the buyer a big chunk of money. In that case, the escrow is most often handled by a company out of town who is working in a 'bulk' arrangement with the seller."
Timothy G. Kearney, a Real Estate Attorney in Connecticut, says that Connecticut is an "attorney state" which means, "attorneys do the closings as opposed to an escrow or title agent in a title state." He says that the rules, "can vary from county to county but are, for the most part, standard." Kearney says that the normal process starts with the Execution of a P&S Contract, passes through title search, scheduling of closing, and then all of the settlements and figures are compared and adjusted, ultimately reaching the closing and conveyance of security deeds.
Anderson says that, "as an agent, I prefer having someone local handle the transaction as it provides the ability to meet face-to-face if a problem arises.", but says that "one of the very best, pleasant, most efficient escrow officers I ever worked with was a woman in Southern California assigned to an REO transaction. And, of course, in California we do not use attorneys as part of the closing process. The real estate agent and broker are responsible for the entire process. I believe have the most rigorous broker license testing in the US."
Kuhn adds the following comment about the Closing: "This final step to your purchasing a home or property can go smoothly if you take a few precautions beforehand. Knowing what questions to ask and reviewing all documents well in advance of the closing day will prepare you for a hassle-free and smooth closing.
Good sound advice and good information. Tell us about your state's procedures and what are your suggestions. We'd love to hear from you.
Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com
TAGS: #escrow #realestate #REO #foreclosure #California #closing
