Closing a Real Estate Property deal constitutes a series of steps and formal procedures. It is quite a tedious activity that requires patience and perseverance. Closing itself means that there are papers that are to be signed after an agreement is reached and the property becomes yours from then. From this article, you will learn some important tips that have to be adhered to through the whole process of closing a deal in real estate if you are a homebuyer.
- Do a Title Search and Obtain Title Insurance
A title search and Title insurance are of great importance once you have bought a property. With them, nobody will claim the property. Even a tax collecting agency that was not paid its full levy or a relative who was not included in a will not be able to claim the property. Title search refers to assessment of public records in order to confirm that the person has legal rights to own a property. With title search, you will find out if there are any claims regarding the property. Any claims should be sorted before closing the deal.
Title insurance refers to compensation insurance that would act as protection from monetary loss if there were any defects on the home that has been bought. It also protects the real estate owners and lenders from loss or any damage that occurs from liens( the right to take property when an obligation is not met), obstruction or defects in title or actual ownership of property.
- Hire an Attorney
While signing the Real Estate Property paperwork or documents, it is important to involve a professional legal counselor although it is not a must-do action. Having an attorney has some advantages like pointing out where there are mishaps in the documents. Therefore, the attorney reviews the documents. Obtaining a title is not an easy task even for the most civilized people in the society, it is very sensitive and for some countries, it is a requirement by the law to involve an attorney while closing a deal.
- Get Pre-approved for a Mortgage
Being preapproved makes the process of closing the deal move faster than the usual. It is not a necessity although it comes with added advantages. For instance, it boosts your bargaining power during negotiation whereby the seller becomes comfortable dealing with you because you have financial security. It also discloses to you the maximum value at which you can buy a property. It saves time and makes your work easier. You energy input is reduced.
- Lock Your Interest Rates
Interest rates keep changing with those offered on mortgage included. An increment of 0.25% interest rate increases your repayment amount or repayment tenure or all of them. This means that it is advisable to lock your interest rates for loans ahead rather than letting yourself be affected by fluctuations that occur at the market before your project is completed. Pre-approved loans have facilities where you can be offered a rate lock. Nevertheless, any rates charged is affected by many parameters such as the applicants credit score ,geographic location, property, type of loan applied for and it could be beneficial to lock interest rates when they are favorable.
- Renegotiate the offer
After house inspection, you may find out that the offer you gave is not worth the home. Therefore, you can renegotiate the offer. This would mean that you would use some of the deducted amount of cash to fix the house or ask the house seller to fix any defects while your price remains the same. Even though it can be difficult to renegotiate, just try to explain to them and if there is problem that cannot be fixed, you can stop the purchase and you shall not be charged any penalties.
The bottom Line
Rarely do people purchase property repeatedly; it is always something that happens once in a lifetime. Closing a deal is tedious and complex but in the end, it is self-satisfactory. Practice patience. It is worth it.