Buying a home will probably be the largest and most significant purchase you will make in your life. It also involves the law of real property, which is unique and raises special issues of practice, and problems not present in other transactions. The Law Office of Joseph A. DiPiazza, LLC assists its residential real estate clients who are buying property by reviewing contracts, preparing legal documents, attending closings and protecting their rights and interests. Also, if you are selling a home, it could be an exciting, but complicated process. The Law Office of Joseph A. DiPiazza, LLC will help guide you and represent your interests from contract to closing.
FAQs
1. What is Attorney Review?
Attorney review is a provision in a residential real estate contract that allows both the buyer and the seller to have the contract reviewed by an attorney before it becomes fully enforceable. You typically have three days from receipt of the fully executed contract to have an attorney review the contract and disapprove of it. At this stage, either party can disapprove of the contract and render it null and void. If the contract is not disapproved within the attorney review period, however, you are bound by the contract as written. Therefore, it is important to contact an attorney immediately. Also, if the contract is disapproved, the attorney can qualify the disapproval with a list of additional provisions that, if accepted by the other side, will allow the attorney to then approve the contract.
2. What does the mortgage process entail?
Once your offer has been accepted and the Purchase and Sale Agreement is executed, you will need to apply and be approved for a mortgage. A mortgage is a transfer of an interest in real estate as security for the repayment of a loan. A typical mortgage transaction involves a home purchaser borrowing money from a lender and entering into a written agreement with the lender, so that the real estate is collateral for the loan.
A borrower obtains a mortgage loan through a process of application and commitment. The borrower initiates the process by submitting an application to the lender. The lender conducts a risk evaluation to determine whether a mortgage loan will be granted. In the risk analysis, the lender evaluates both the borrower's financial position and the value of the real estate. If the lender determines the risk to be acceptable, the lender will issue a loan commitment detailing the loan amount, repayment terms, interest rate, and other pertinent conditions. After you have obtained a mortgage commitment, review it carefully. Make sure the rate and terms are correct before you sign the commitment and return it to the lender. There may be certain conditions that must be satisfied prior to closing. Be sure to provide your attorney with a copy of your commitment and conditions. When the borrower accepts the commitment, a binding contract for a mortgage loan is created.
Residential mortgage loans usually bear interest at a fixed annual percentage rate over a period of fifteen or thirty years. The interest rate is determined by the prevailing market conditions at the time the loan is made. A lender may increase its yield beyond the stated interest rate by requiring the borrower to pay "points" at the time the loan is made. One point equals one percent of the loan amount. It may also be beneficial for the borrower to pay points in order to reduce the interest rate over the term of the loan.
3. How can I check my credit rating before I apply for a mortgage?
Your credit rating is based on a combined score generated from three credit bureaus that look at your credit history, amount of credit available, and recent inquiries to determine what is called your FICO score. As a Buyer, you should have your mortgage professional check your rating for you and, if appropriate, suggest ways for you to improve your credit.
4. What is title insurance and why do I need it?
The purpose of title insurance is to insure for unknown defects. Unknown defects can include forgeries, fraud, improper court proceedings, missing heirs, recording mistakes, and numerous other potential title defects that could be difficult or impossible to uncover during an extensive title search. As such, title insurance guarantees the policy holder (i.e. the owner or the lender who holds a mortgage on property) marketable title. In other words, if you have title insurance, you are insured that your property can be conveyed to another without defects or encumbrances.
In addition, title insurance protects the policy holder from claims against the properties from others. For example, if a neighbor claims he owns part of your property and decides to sue you to that effect, your title policy will pay to defend that claim up to the amount of your policy.
5. What are home inspections?
Getting your future home approved by an inspector is a vital step in the buying process. A home inspection will teach buyers about the home’s potential problems so buyers can make an informed decision about whether to continue with the purchase. The inspector will examine the structure and systems of the home (such as the heating, plumbing, and electrical). The inspector generally delivers a written report immediately after the inspection and advises if there are existing or potential problems and may recommend ways to address them. If the inspector finds many problems and gives the home failing grades, you may withdraw from the agreement provided that was in the contingency clause in your offer. You can also have the home inspected for termites, radon, lead paint, and asbestos, which is not covered in a basic inspection.
6. What happens at the closing?
The closing is the final and most important event in the purchase and sale transaction. You should walk through the home within 24 hours of the closing to make sure it looks as you expected and is in move-in condition. This final inspection gives you the opportunity to see that the seller has moved out and completed all repairs agreed to in the sales contract. Make sure all appliances and systems are working and that any items the seller agreed to leave behind are in the house.
Prior to the closing date, you will be advised of the amount and type of funds to bring to closing. You must anticipate paying certain closing costs in connection with the purchase.
7. What are some standard closing costs?
Some standard closing costs include:
• Down payment
• Attorney fees
• Realtor commissions
• Title search (a check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding)
• Title insurance
• Municipal lien search (to determine that there are no outstanding legal claims against the property that must be paid when the property is sold)
• Appraisal
• Credit report and a certified plot plan
• A full-year insurance binder
• Recording fees and transfer charges and
• Prepaid interest due on the mortgage for the month in which you are closing the loan
All transactions differ and the final closing figures will depend on many factors. The buyer will have to go to the bank to get a wire or cashier's check and bring the necessary money to the closing. At the closing, the buyer will review and sign loan and transfer documents. The seller will provide a deed, which conveys the transfer of ownership interest in the property to the buyer's name. Money will be exchanged, including funds for the closing costs. Those present at the closing often include the buyer and seller, their respective attorneys, the title closer (representative of the title company), an attorney for any lending institution, and the real estate broker. Some of the documents that may be required include the closing disclosure, mortgage note, mortgage papers, deed, loan application and bill of sale.
Contact The Law Office of Joseph A. DiPiazza, LLC
Joseph DiPiazza, Esq. takes great pride in providing top-notch and personal service to New Jersey residential real estate clients. If you are buying, selling or refinancing a property, you should contact and retain an attorney with the experience and skill you deserve. If you have any questions regarding your real estate matter, please do not hesitate to contact The Law Office of Joseph A. DiPiazza, LLC at 201-494-2800.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
