Post-License Ch.13 Summary Notes
The closing checklist can be a simple “to-do” list, but it’s better if you also track when each item needs to be completed and who’s responsible for it.
An escrow account is required if the buyer has a down payment of less than 20% of the selling price. The money must be deposited within three business days. You should send a copy to any other agents who are involved
- Secure financing.
- Receive and deposit earnest m money.
- Order title/title insurance.
The first thing a buyer needs to do once a sales agreement has been reached is secure financing for the property.
An earnest money deposit is typically made by the buyer. Deposited within three business days and held in an escrow account separate from other monies.
The mortgage company will order a title search as part of the loan qualifying process, but it may be up to the agent to order title insurance.
The mortgage lender typically orders an appraisal of the property, to ensure that the home’s value is in line with the sale price.
Hazard insurance should be purchased as soon as possible. Doesn’t cover water damage caused by flooding. It’s in the best interest of everyone for the buyer to have a home inspection.
It’s important that contingencies are met as soon as possible, as the sales contract cannot be closed until then.
A pest inspection can happen in conjunction with a home inspection, but they will be conducted by two different inspectors.
Once the home and pest inspections have been completed, copies of both reports need to be sent to the seller, regardless of whether the buyer is requesting repairs.
Once the seller has made the requested repairs, suggest that the buyer conduct another inspection to verify that the repairs have been made.
Once all of the documents have been prepared, the title company will set a close date and will notify the mortgage company and the agents.
Included with the closing package will be a settlement sheet that explains all monies that are due at the closing. Once the closing date has been set, the buyer has the option of walking through the home one more time.
Prepare your client for a longer closing.
Every home purchase that’s completed using a commercial mortgage lender or bank must include a Truth-in- Lending statement at the closing.
The next document presented will likely be a clean, typed copy of the loan application.
The mortgage paperwork will also need to be signed by the borrower. The mortgage is the security for the loan. The note is the actual loan being used to purchase the house. The deed to the house is formally transferred at closing as well.
The documentary stamp is essentially a tax that’s charged when interest in real property is transferred.
RESPA – TRID rule:
- Your home loan toolkit.
- Loan Estimate of settlemen
- Closing Disclosure.