Buying a home is a huge purchase for you. Here are some “smart" tips for you:
Offer to Purchase: Although not often explained to a buyer, this “binder" may have full legal force and hold you to a deal. Make sure to have it reviewed by your attorney and that it contains the words, “memorandum of understanding only – purchase and sale to be signed by all parties within seven days; failing which the offer to purchase will become null and void." Be sure to give yourself contingencies for all inspections, obtaining a firm mortgage commitment, Compliance with Title V (septic), and the sale of your existing home, etc.
Purchase and Sale: Although it says standard, it is not. There are legal terms and clauses in it that are routinely modified and negotiated by attorneys with riders and addendums. Don’t put your broker in a position where you are in essence asking them to act as your attorney. This is not the place to save money.
Inspections and Preliminary Title: This part of the process allows for your inspections. You have the right to back out of the deal or renegotiate based on information learned by way of these inspections. Try to review any easement, conservation and survey issues along with title V (septic) reports and zoning issues prior to the end of your contingency period. Better to see what limits on the property exist now rather than just before closing.
Lender Issues: Work with an experienced and reputable mortgage broker or lender. There is a lot involved in qualifying someone for a loan these days. Be honest with your broker. Run a credit report on yourself before you look for a mortgage. There may be errors or items that need to be resolved prior to submission of the loan application.
Remember: Although the lender’s attorney may have some obligations to you as a consumer, they don’t represent you. When offered, purchase the owner’s part of the title insurance to transfer your risk of most title problems not necessarily a concern in this closing but may surface when you resell or refinance. The one time fee is worth the coverage. Also, obtain the correct home owner’s insurance. The lender’s minimum may not be sufficient for you needs. If your property is in a flood zone, buy flood insurance without question.
Closing: Try to review at least the settlement statement prior to the closing. These are traditionally not available until very near the closing due to late arriving information. Since you are not familiar with the form and some of the costs, you should have someone review it for you. At closing, review the plot plan to see if it conforms to your understanding of the location, size and shape of the lot. Consider recording a homestead declaration at the time of closing. The lender’s attorney will usually prepare one for you for a small charge.
Post Closing: It is a good idea to have the locks changed and confirm the utilities have been transferred to you. You should request a package of the signed documents. Many closing attorneys can now have these scanned and emailed to you.
ENJOY your new home!