Seller Disclosures Protect You
Homebuyers will receive several types of disclosures from the seller once the purchase offer has been signed. These disclosures protect the buyer from fraud and from purchasing a home that may have hidden defects.
They include:
i) Disclosure Regarding Real Estate Relationships – defining the relationship between the seller and their real estate agent
ii) Natural Hazard Disclosure Statement – based on a report ordered during the escrow process
iii) Real Estate Transfer Disclosure Statement – requires the seller to note all features that convey with the property, any defects of which they are aware, and any natural or environmental hazards that are present
iv) Homeowners Associations Documents – the seller must provide a copy of the latest rules and regulations if you are purchasing a home in a development managed by a homeowners association.
It’s important that you fully understand the implications of any disclosures made by the seller that could affect your enjoyment of your new home. Ask your real estate agent for assistance if you have questions about these disclosures.
From Purchase Agreement to Closing
Once you and the seller have signed the purchase agreement, a number of individuals and companies will assist you in closing on your new home. The process varies from state to state. In California, and some other markets, the escrow company will play a key role. Escrow companies are neutral parties in your purchase transaction, favoring neither the buyer nor the seller. They are vital to the purchase of your home, since they handle the massive amounts of paperwork required by law. They also ensure that all of the terms of your contract are met by both parties, and that everyone is paid what they are due. However, in some states, these functions are handled by attorneys or other parties.
During the escrow period, the title insurance company, or an abstract and title company, will research the title to the property you are purchasing. The purpose is to prove that the seller has clear title to the property, and that no liens exist that would put into question who owns the property.
After your home purchase agreement is in place, you will need to make appointments for a pest inspection, home inspection and appraisal. The results of these inspections generally call for further negotiating between the seller and buyer. Once all of your contingencies are removed, the remainder of the process is generally uneventful. Your agent will update you on progress towards closing, and will communicate frequently with the parties that will be responsible for assisting you with the final paperwork.
Prior to the close of your sale, lenders are required to provide you with an estimate of closing costs. These costs include the loan origination fees, owner and lender title insurance, attorneys’ fees, recording fees, and tax stamp fees, among others. This estimate represents the amount you can expect to pay at closing.
After all terms have been met, and financing is in place, the escrow company or other entity will provide you with the legal documents for your signature. You may want to ask your real estate agent to accompany you when you sign these documents, so that they can answer any questions you might have. This is the final step in the actual purchase of your new home. Congratulations – you are now a homeowner!
Focus on Long-term Success as a Homeowner
Homeownership is an exhilarating experience, and helps you establish a new place in your community and puts you and your family on the path to financial success. But from time to time, unexpected financial problems such as unemployment or medical bills make it difficult for homeowners to continue making their mortgage payments on time. Even the most responsible homeowners sometimes need help. If you find yourself in this position, the following are potential sources of assistance:
Your lender. The company that holds your mortgage loan can often work with you to temporarily lower your payments or offer other workout options so that you can stay in your home. It’s best to contact your lender as soon as you think you may need assistance in order to have the largest number of options. The longer you wait to talk to your lender, the more difficult it will be to resolve your issues.
Counseling agencies. Homeownership counseling agencies offer personal, confidential services to those who are having problems making their mortgage payments. Their financial professionals can direct you to loan assistance programs, job training programs and other options to help you avoid foreclosure of your home.
Some states also offer programs to assist distressed homebuyers. To learn more about these programs, contact a homeownership counseling agency or the U.S. Department of Housing and Urban Development (www.hud.gov)
Achieving the American Dream of Homeownership
Owning a home is much more than choosing a place to live. Homeownership establishes a place in the community where you and your family can thrive. It also represents an emotional, as well as a financial, investment that will pay dividends to you for many years to come.
We believe homeownership is the cornerstone of the American Dream. Asian American families, whether they have been in the United States for several generations or new immigrants, can build a strong financial and solid future through homeownership.
