Large home on a foggy night

5 Easy tips to avoid scary surprises at the closing table

As we enter the “spooky” season, scarier than Freddy Krueger, scary surprises, leading to anything other than “everyone walks away happy” at their real estate closing.

Agents, Loan officers, Parties and Closing firms can do much to avoid Frightening results at Closing. Today, we want to share 5 easy tips for all to consider regardless of the attorney, Agents, Loan Officers involved in A Closing. These tips apply Across the the industry. Do these 5 things and you have Much Better odds of avoiding a Monstrous closing.

Tip #1: Maybe some “see Dead People” but most of us don’t communicate with ghosts

Take-Away – Emails (and for that matter Texts) are like talking to ghosts. If there is no response on the other end, you haven’t communicated. Proving you sent an email might clear your conscience but won’t solve the problem and prevent a delay. Insist on a response and if you don’t get one follow up early. Unlike talking to ghosts, make sure your partners and vendors are really communicating with you.

Tip #2: That Hairy Werewolf will Get you every time…

Translation: Failing to do the right due diligence every step of the way is how the hairy deals Bite us at the Table. When we start with a borrower, buyer and a Seller, we need to know everything that could impair title, cause qualification problems with the loan prior to the Day of closing. So go hard early with loan approval and title work and always check in with one another early to address possible problems, below are a few common ones:

One Seller – Two on Title = Possible dead person in immediate back chain.
Tax Deed = Seller you represent may or may not have authority to sell.
Open Equity lines really scare Title insurance Companies and every effort needs to be made early to find the lender and obtain a cancellation.
Of course there are lots of examples of challenging situations for all of us, divorce, bankruptcy, etc. and we just talked about a few but the key is to deal with them early!

Tip #3: When the master thieves in oceans eleven made off with the big diamond at the Casino, every Detail was known and committed to memory.

Translation: The Contract and the Federal Lender Requirements must be known by all professionals and conveyed to the parties.

We, along with the agents and lenders have to know every detail and make sure the “rules” and the deadlines are adhered to. If your are the agent, don’t be a Day late on a Deadline! The other side doesn’t have to be nice and extend (unless the contract allows for a curative period). Example a Day Late for loan application or due diligence per the contract might cost the buyer their Earnest Money. Another example, If you are the Lender, Attorney and even Agent for the buyer, under CFPB, You have to know the last day for the three days prior to closing to Get out the CD to the borrower. Lenders can’t make an exception if the closing is governed by Tila/Respa … so it’s up to the people – loan officers, processors, closing firm staff and even agents to make sure the rule is adhered to.

Tip # 4: Scared of the Dark? Take Inventory of the surroundings before you turn off the light!

Translation: Don’t Get to The Closing Table without reviewing and correcting everything you could see if you just looked at the Final ALTA and/or CDs.

Law Firms, Realtors and Lenders (and parties) – Check the final ALTA Settlement Statement (or HUD-1) and make sure Lender and Law firm have the Names, Zip Codes, Dates, Bottom lines, Vendor payments etc. correct before we are sitting together at a closing. It may seem like no big deal but misspelling a last name by a lender (even if an Attorney has it right) can lead to an extra hour at the table – the lender to create a whole new package and some are faster than others. Heaven forbid we missed a Fee to the buyer Borrower requiring more money, now we are talking about going back to underwriting.

Tip#5: Where, When and Who is always important in any horror or suspense film.

Translation: Where, When and Who (and I’ll add one more What) is just as Important the Day of closing!

Where: Unfortunately, once you grow and have two offices (or More) for closings, murphy’s law says one party will end up at the wrong office unless the location is clear and conveyed to all persons. We want the parties to be happy and the professionals to shine, and when they go to the wrong office, that’s stress that should have been avoided.

When: Make sure Everyone is on the same page too with date of closing and time!

Who: Seems easy enough but it’s not uncommon for the Seller or Borrowers on a refinance to think only one spouse has to be at closing.

What: What is needed for day of closings: Funds – anything over $5,000 requires by GA law a wire, so Parties required to bring funds need Good Wiring instructions and to avoid tragedy should search for a valid Phone number for the law firm and confirm the instructions with the firm. What else? Valid ID – A closing can’t disburse without that valid ID no matter how well or unknown to agents and lenders the parties may be. To protect everyone from Fraud (scariest thing to all of us), we have to receive and review the ID!

So there you have it 5 easy tips which should allow us all to walk away happy from the closing table even on Halloween or for all of us Even Scarier, A Friday falling on the last business day of the month!

Jack-o-lantern with dark background

Trick or Treat! Tricks to a Smooth Closing, and our Halloween Treat

By Doug Dean

Trick or Treat!  It’s that time of year!  In our Trick or Treat edition, we will give you Tricks to ensure smooth closings, and our Halloween Treat for you.

One way we like to assist real estate agents that we work with is by providing CE (continuing education) classes.  I’m currently teaching about 4 CE Classes each month (check our website calendar for a list of CE classes).  I really enjoy teaching CE classes, meeting the students and providing not only the necessary CE credits, but also helpful information.

One of our popular classes is “From Contract to Closing: What to Expect From The Closing Process”.   It’s based on our attorney’s collective knowledge from closing tens of thousands of transactions over 15+ years.  I’ve summarized a few of the key points below.  While many might seem simple and basic, it is often the overlooked basic items that cause problems, not the obscure areas of the law.  Understanding the Tricks below will help ensure your closings go smoothly and on-time!

Trick #1: “The 411” When we begin processing a file, we reach out to the buyers and sellers, to gather important information needed for closing.  A contract that has Buyer and Seller names spelled properly, with phone numbers and email addresses, allows us to get to work much more quickly, without having to go back to the agents to get contact information for the parties.

Trick #2: “The Information Sheets” Most all firms, ours included, have Buyer and Seller Information Sheets, which are used to collect information we need to process the file for closing.  Let your parties know to anticipate receiving an information sheet, and ask them to complete it and return it promptly.  Delays in receiving this critical information slows down our ability to order information we need for closing, like payoffs, HOA information, insurance, etc.

Trick #3: “Beware the HOA/COA Closing Letter!”  If the property is in a community with an HOA or COA (Home Owners Association or Condo Owners Association), we will need an HOA/COA Closing Letter from the Association.  This official document gives us information about the current account, confirming if it is paid current, and fees we might need to collect at closing, such as an Initiation Fee, Transfer Fee, and the like.

There is typically a fee to obtain this Closing Letter, and they are often expensive (anywhere from $10 to $1000; if you can believe that!).  We look to the purchase/sales contract for the “Community Association Disclosure” to see which party is obligated to pay for the Closing Letter.  We make arrangements with the Association to order the Closing Letter, and contact the responsible party to pay for it.  If a party does not timely pay for the Letter, it can either delay the closing, or the cost will go up, because now the HOA will want a “Rush Fee” of perhaps $200 or more.

Make sure your parties are aware that they may be responsible for paying for an HOA/COA Closing Letter, and that doing so timely will keep the closing on schedule and avoid paying rush fees for the Closing Letter.

Trick #4: “The Same Page” Contracts are often revised, to address inspection findings, changes in sales price or closing costs, etc.  Be sure that the Lender and Closing Attorney are kept in the loop on contract amendments.  At one closing, the parties asked for the $500 deck repair credit from the Seller to the Buyer.  We advised that we had not seen that, and could they provide more information?  They advised it was in Amendment 4 of the Contract.  Unfortunately, both the Lender and our firm had only received through Amendment 2 of the contract.  The loan had to go back through underwriting with the Lender to address Amendments 3 & 4, resulting in a lengthy delay at closing.

Trick #5: “The Review” Ask for a preliminary copy of the Closing Statement at least a day before closing.  Review it carefully, looking for such items as: Earnest money (is it shown on the closing statement; in the correct amount; held by the proper party)?  Home Warranty (issued by the proper company?; proper amount?; paid for by the proper party?) the Sales Commission (broker names listed properly? payment amounts correct?).  You get the idea.  With a little review in advance, any inadvertent errors can be quickly fixed before closing.

Trick #6: “Show Me the Money!” Be sure that your parties know how much to bring to closing, and in what form.  Make sure they wire funds in excess of $5,000, and that you have advised them about how to avoid wire fraud.  For amounts less than $5,000, check with your closing attorney to see what amounts may be paid with a personal check, and what amounts require a cashier’s check.

Enough Tricks!  Now, for the Treat!

Halloween Spirit Treat   Do you have photos of your Halloween Spirit?  We’d love to see them!  Your favorite Halloween costumes for you, your children, or pets?  Your Halloween party?  Your house, decorated for Halloween?  Post your Halloween Spirit photos to Facebook or Instagram, and tag Shafritz & Dean, LLC.  We will pick our favorite Halloween spirit photos, and give out a few cash prizes for 1ST, 2ND, and 3RD place!

Trick or Treat!  Have fun, and be safe!

Hot charcoal

Don’t Get Burnt By Cold Feet

By Richard Shafritz & Douglas Dean

Wow… what a month it’s been!

Activity is significant, but we saw a rash of Purchasers of all kinds getting cold feet after the due diligence period lapsed, after the appraisal contingency lapsed and after the opportunity to terminate lapsed. A pattern seemed to take shape: Purchaser became anxious for one reason or another (justified or otherwise) and wanted to unilaterally terminate; unfortunately, they simply were not in a position to do so. When their agents contacted Shafritz & Dean, we became the messenger of what happens when you want to terminate, but the other party doesn’t, & worst of all, you don’t have the unilateral right to do so any longer.

So let’s start with some generic examples of what happened.

Example 1 – Agent calls me to tell me the client wants to terminate as home did not appraise initially. Agent was told orally by listing agent that Seller would not sign amendment presented to reduce price. Armed with that information, agent showed new home to her client who fell in love. You guessed it, Seller on first property signed the amendment and now a real problem existed for the Purchaser, since they could not buy both homes. They tried to unilaterally terminate and of course were told that was not acceptable.

Example 2 – Investor purchased home “as is” with limited due diligence period. When they pulled down a decorative blanket placed by the tenant during their walk through and after the due diligence period, to their surprise they discovered what appeared to be mold and water damage. They wanted to unilaterally terminate and the Seller hired a good attorney who notified our firm the next day we needed to hold the earnest money and be prepared for potential litigation.

Example 3 – Purchaser and Seller agreed that Seller would make numerous repairs to the property, following written underwriting approval by Purchaser’s lender. Purchaser wanted to terminate despite only providing written underwriting approval 24 hours or less and after extending the contract unilaterally due to their lender requiring additional time. Seller was unwilling to do so and has threatened litigation.

Why is this happening so frequently?

We believe the Buyers are not fully aware of the rights of the Seller (and perhaps vice versa) when a default occurs. Agents must know the GAR contract inside and out, and this means ensuring your clients know what the risk is of failing to perform or default.

Under GAR Contract Section C.2 a.-c. The defaulting party is liable, and for much more than earnest money. “Any lawful remedy may be pursued against the defaulting party.” Section C.2.a. The broker may pursue commissions under Section C.2.b. and perhaps worst of all the non-prevailing party will be liable to the prevailing party for reasonable fees under Section C.2.c.

So you may be wondering how these and other “fine messes were resolved.” Several are ongoing but 2 were resolved: one for the Earnest Money plus damages under $5000, and one for a five figure settlement. Oh… in one case the buyer didn’t believe us, and so they met with an outstanding local real estate attorney. That buyer settled for five figures (not including the attorney charges).

Don’t let this happen to your clients, and don’t get caught in the middle.

Even though it is a sellers market, if you want to limit liability to the Earnest Money, submit your offer accordingly. Call or email us for guidance on contracts and look for our CEs on drafting etc. Don’t let your buyers get burnt!

What the heck is a “Title Czar”

Ken Grim HeadshotNow that’s a funny name!

As our firm has grown, we decided what we needed was an attorney with significant underwriting experience, practical closing experience and substantial title clearing experience. Fortunately, Ken Grim was available and an obvious choice.

Ken worked briefly for us when the Great Recession was going on.  However, prior to become a lawyer, Ken was an actual “deed dog” i.e. title examiner.  During his approximate 25 years as a licensed attorney in Georgia, about one third of this time has been spent in residential and commercial title insurance underwriting, with both national and regional title insurance companies.   Ken’s other experiences include being a lead title curative attorney at one of the larger firms in Georgia and helping with closings and business law matters elsewhere.

We don’t like to brag but we are proud that Ken joined our team.  As our “Title Czar” he is both an internal and external “help desk” for all things title.  He reviews every title exam and assists staff, “friends of the firm” and even other attorneys with solutions to challenging title problems or just answers to questions.

You can reach Ken at [email protected].

Suburban home with Under Contract sign in front

Breaking a Real-Estate Closing Stalemate

Yesterday, I found myself breaking a stalemate –

My firm had closed a file in escrow, where the Buyer and his Lender had refused to send the funds to our escrow account until the Seller vacated the home. The Seller refused to vacate the home until she received a check.

Surprisingly, this does not happen more often. Who was right and who was in breach? As with any legal question: it depends which party the lawyer represents! So let’s figure out how to solve the problem and avoid a lawsuit.

The Lender’s Perspective

If you represent the Lender, this particular Lender is housed in California (which is an “escrow state”). They do not fund closings the day they close. My first step was to explain that, without the funds in our escrow account, the Buyer would not be “ready to close.” So I quickly pointed out the difference between California and Georgia and explained the necessity for the funds to make their way into our escrow account. We provided assurances in writing that no funds would be disbursed until the home was ready to be transferred. So remind those Escrow State lenders that, in Georgia, purchase transactions generally fund the day of closing.

What about the seller?

Here, the Seller has a point, right? Does she have to “vacate” the house before closing? Of course not, because it’s her primary residence and without the proceeds she has nowhere to go. However, the story doesn’t end there. The Seller had promised to vacate home and we all know the contract typically has a clause that the “home shall be broom swept clean” to define just how vacant the home is supposed to be. Well here, the Seller actually suggested that the house was finally clean but the prospective Buyer needed to call animal control to “pick up the dogs.”

What to do next?

So the seller has not exactly performed and is far from inspiring the buyer.

Who will blink? When we are involved, hopefully, (as occurred yesterday with my involvement), all three will blink. Lender agreed with my earlier analysis to send their funds; the Buyer finally understood telling everyone you were ready was not the same as showing everyone by wiring the funds to our attorney’s trust account. Of course I assured him that under no circumstances based on the Seller’s (bizarre) behavior would we disburse until she “finished the job,” and removed the debris and dogs from the property.

Lastly, a skilled staff person gently took my less than gentle message back to the Seller – “everything but the dog” was not good enough. If you want your check Ms. Seller, get the debris and the dog out. The Buyer will then be at the home with his agent for a final walkthrough and only after confirmation will we hand the Seller her check.

Takeaways –

If you represent the Buyer – make sure they perform under the contract. I don’t care if they had a bad experience previously, no money in an attorney’s IOLTA escrow account the day of closing is failure to perform. Ditto for the Lender!

If you represent the Seller – make sure the Seller has the home ready for transfer. It should comply with the contract and, but for the exchange at the closing, be imminently ready for transfer. Failure by the Seller to do so is a potential breach.

This was a low dollar distressed sale but we had a recent high dollar sale with similar challenges. The Buyer wanted the nail holes filled and the “walls painted,” and the Seller and his agent explained the “paint was more than 15 years old” and it would not match. Wow, were they right! So how is this the same? Because expectations as to how to deliver the home were not consistent between parties and it led to a tense and delayed closing in both cases. So the good news, the deals both closed, but the bad news was they weren’t completed in less than 1 hour.

Key Takeaway

Manage your clients and ensure they fulfill the obligations of their contract and perform accordingly up to and even after closing.

Horseshoe on a wooden wall

10 Tips For A Smooth Closing

Leave luck to the lottery, St. Patricks day and horseshoes…

We are often asked how to have great closings, and it truly does take a village.  Recently a mortgage buddy told me there are 1260 things that can go wrong from the time a person starts to look for their home until they close.  I have no idea how he or his company came up with that stat.  I bet it’s more!  There are so many humans using so many programs and hardware that what’s amazing isn’t the little hiccups but rather how often things go right.

But we at Shafritz & Dean are after more than, “we go it closed”.  After all our tag-line is “Everyone Walks Away Happy” and that’s what we aspire to!  Here are 10 tips to those of us serving buyers, sellers and borrowers coming from a guy who has been a loan officer for 10 years (including commercial and residential) and an attorney for nearly 20 now.   Said another way … I am getting old J.

I have always known that a smooth closing, a good closing, includes three things – 1) efficient – 1 hr. or less, 2) funded and disbursed … our friends of the firm want to walk away with their commissions and 3) good chocolates on the table!    The only thing we can do without the help of the lender and the realtors is make sure our chocolate selection is grand and the bowl filled! For the other two items above keep reading….

These tips, which are not the complete list, will lead to a better closing experience for all and they are true whether you close with Shafritz & Dean as we hope and prefer or anywhere else.  [Note: These 10 tips are not designed to address the things which are not related to the closing.  So for example, we aren’t getting into drafting issues or rate lock issues.  Those are your expertise.] 

Tip # 1:  Agents insist on the ALTA Combined Closing Statements (CSS) a minimum of 3 days in advance and read them closely prior to closing – read them for typos, for items on the other side which may impact your client (ex. Home warranty … if you represent the buyer and seller is paying look to see it’s on the seller side), for correct figures, for correct closing cost contributions and yes is your commission correct.  Note that if the Broker name is misspelled on the prelim ALTA, if it doesn’t get fixed it will be misspelled on your commission checks.

Tip # 2:  Pay at Closes and Disbursement Authorizations are great but they must be correct and you have to remember to bring the Earnest Money.  As a young loan officer I often heard agents complain about the gap between the closing and when they got paid.  Now brokers treat agents like clients (as I think they should!) and want to allow them to get their portion of the commission at closing.  Unfortunately, we often find the math is wrong and just as often even the experienced agent forgets the earnest money.  This delays closing and makes it taxing on everyone.  So when you pickup the PAC or DA, make sure you tic and tie it to the ALTA CSS and pick up that EM!!!

Tip #3:  Get a confirmation the attorney has received the contract and the title order from the lender!  Technology is great, but remember: it’s not communication when you send an email, it’s communication when someone receives and responds to your email.  Our firm has a process and we let everyone know that we confirm every order.  We do this to express our sincere gratitude that we have been selected to assist parties and professionals with a closing and to confirm receipt of the order!  I can’t tell you the number of times agents thought they sent a contract or loan officers/processors thought they sent a title request only to have everyone scrambling at the eleventh hour.  Finger pointing aside, if the law firm, doesn’t have the order, it’s not being processed.  So either get the confirmation from the firms who do confirm or contact those who don’t.  No news is not always good news 

Tip #4: Wires … oy vey they drive me crazy part 1 – Georgia law is clear – for funds in excess of $5000 we must have a wire.  Not an ACH, not bitcoins or a promise that the wire is on the way.   Yet, people send ACHs which many firms like ours summarily reject and even those who don’t are left waiting days sometime for the ACHs to show and for the reverse period (yes ACHs can be challenged and reversed) to expire.  Or they want to bring a Cashier’s Check for a large sum of money.  If a client intends to use a large cashiers check, it must be delivered well in advance of closing so that it can be deposited and clear the account  [Yes –Cashier’s check checks can be frozen, have a stop-payment, or be returned, so they must clear the account in advance of closing.] 

For the record, no reputable will accept bit-coins or any crypto-currency for closings.  And while a bag of cash may be legal tender, most firms including ours don’t want more than a small amount in cash.  Too much risk that we may get intercepted on the way to the bank.  [Remember It’s a Wonderful Life and Jimmy Stewart’s uncle losing $10,000 of the savings and loan.]  So let’s make sure from day 1 to day of closing it’s clear that parties need to wire funds. 

Finally, tell your frugal clients that their bankers in attempt to save them up to $25 will suggest they electronically transfer their money.  This is code for ACH and remind them to stay strong and pay the wire fee! 

Tip #5 Wires … oy vey they drive me crazy part 2- Wires are great except when fraudsters get involved and encourage your clients to wire funds to their bogus accounts and encourage law firms to wire proceeds to bogus accounts.  “Stay out of the middle” is the summary from an earlier article on wire fraud, and make sure your clients contact the closing attorney directly for wire instructions and confirm independently they are valid.  One agent suggested that, on no less than 4 closings (all with different attorneys), fraudsters had encourage her clients to send a wire to their bogus account.  News flash… it could be your email has been compromised.  Don’t get in the middle and if it happens more than once consider better email security.

Tip #6: Certain Days are better than others – There are 6 -7 days which I advise my relationships to avoid closing because they are inevitably much busier – believe it or not we’ll close 60% of our transactions on Fridays, the last day for residential refis to come out of rescission and the last calendar day of the month.  Double witching day is when Friday is the last business day of the month, but, for some reason, people like these days. 

Buyers like Fridays so they can move over the weekend.  But if they close Thursday, buyers can have a 3 day weekend. 

Loan officers are ever-cognizant of the last day for refinances to close, and still fund in the same month, after the 3-days right-to-cancel expires.  This is done to minimize the amount of per-diem interest paid for the remainder of the month.  Just close a day or two earlier, and you’ll avoid the rush. 

Finally the last day of the month.  Someone told an agent along time ago it’s better for the buyer if you close the last day of the month and you’ll save money.  This is inaccurate.  You may save having to bring a little less money to closing, but you are not saving money.  Many lenders will do an interest credit up to 5 days so you could close the first 5 days of the month and have no prepaid interest those days.  

My loan officers buddies who close refis the last day of the month… while I love the business it’s got to be the worst day possible to schedule a refi.  Unless your rate lock is expiring, the party is leaving the country for a month the following day and there is no other alternative, avoid scheduling a refinance the last business day of the month.

Tip #8: Who, what, when and where…

Who – make sure the right people come to closing – wife or husband is going on security deed then they have to be at the closing.  Wife and Husband are both on title both need to show up (or provide an acceptable alternative i.e. POA—which must be arranged and confirmed in advance). This causes more delays than are necessary, and delays closing, funding and disbursing a file.

What – In addition to who, we need to know what to bring – two forms of ID one of which is Driver’s License – current license or if no license a current valid passport.   It really surprises me when parties show up with no current license.  They forgot or don’t have one and everyone wants me to make an exception.  Sorry – we live in 2018 where identity theft is real and where people create grand fraud schemes. 

Bring your checkbook because if you have to come out of pocket for a nominal sum (our firm $1000 at most some firms it’s $500) most firms will accept a check to keep things moving.  

Bring anything you think you have scanned to the attorney which might be needed such as the Home Owners Insurance (Declarations Page + Invoice or Paid Receipt), Trust Documents, Death Certificates etc. 

When & Where – Despite our best efforts parties and professionals are not always tuned in for the day and time of closing.  Sometimes they know and decide to come later or earlier. We all have limited bandwidth and if you are an hour late for a closing you don’t just delay the parties at closing by an hour.  It may be that we have closings right behind yours and so the delay becomes several hours. 

Also, once a law firm has more than 1 address it’s an invitation for people to go to the wrong location.  These kind of details need to be confirmed before one party shows up at our Perimeter office and the other at our Suwanee office and we have to wait 35 minutes (without traffic) for the parties to show up in the right location. 

So iron out those details with the firm and with your clients so we end up at the right place and at the right time.

Tip # 9 Make sure the lender and attorney have all necessary addendums.  Many years ago if the sales price changed by going down or a repair had to be made, we could find out at closing with limited delay.  Today, that’s a disaster and it happens – I have received amendments at closing which result in hours or days of delays because the agents forgot to send the amendment to the lender and attorney.  So once you amend the original contract and every time you do so, please make sure the lender and secondarily the law firm receives any changes.

Tip # 10 We are dealing with people; when you know people are difficult or their situations are difficult let the law firm know.  Husband and wife hate each other and will be getting a divorce, it’s a good idea to share this in advance with your friendly neighborhood attorney.  The worst shouting ever at my closing table has been husbands and wives (or exs.) who are screaming at each other while the rest of us look for the closest exit. 

How about the dreaded “reader.”  That person is guaranteed unless the most skilled attorney can work them quicker to turn a 45 minute closing into a three hour closing at best.  What should we do – get them the package prior to closing.  Not sure you have a reader but think you might?  Ask them and explain that everyone including the firm budgets approximately 1 hour for closing and it will take them 6 hours to really read the package.  This will encourage the reader to ask for the package up front and avoid them reading at the table.

Finally one more example we see frequently see are parties or agents who don’t like one another.  If we know up front we can separate parties.

Push them to be at the closing at the same time just in different rooms because when parties schedule different times even when they aren’t at odds there is more room for problems and delays since one party may not discover an error even in their favor which the other party finds later that day.

So, there you have it… a “top ten” list that, if followed, will guarantee smoother and happier closings!   

What Are Real Estate Commissions?

 

Like the video says – real estate agents aren’t paid by the hour!They’re paid a percentage of the purchase price in a successful real estate transaction.

When one agent represents the sellers and another represents the buyers the commission is typically split between them.
In the US, real estate commissions are commonly 6% of the transaction usually 3%/3% when split.

No government or industry body sets commission rates.  Legally, commission rates ARE negotiable.  However, remember that agents only earn their commission on successful sales.

Consider the work you want them to do for you to evaluate the value you should put on the commission they earn.

Closing Costs Explained Visually

 

Purchasing a home is exciting. Once escrow begins, the excitement can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate.

Closing costs simply refer to the fees associated with various things associated with the escrow process in a real estate transaction. In the excitement of having an offer accepted for your dream home, you can easily lose track of the fact you are going to need to have some serious cash on hand to pay them. Many people make the mistake of only assuming they need the down payment money, and have to rush around town trying to come up with money for the closing fees.

Do yourself a favor, and discuss closing costs in advance with your real estate or mortgage person.  And watch this video to have a good mental picture of the costs that you’re likely to incur.

 

Title Insurance Explained Visually

 

What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead.

A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill.

It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?

Do yourself a favor. When you buy a home, buy title insurance.  And watch the video to understand the essentials.

What Is An Escrow Account? Do I Need One?

 

As we show you in this video, an escrow account is an account, established by your lender, to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance mortgage insurance (if applicable), and property taxes.

Escrow accounts are a good idea because they assure money will always be available for these payments.

If you use an escrow account to pay property tax or homeowner’s insurance make sure you are not penalized for late payments since it is the lender’s responsibility to make those payments.