 |
 |
||||
 |
 |
|
|||
 |
CAVEAT EMPTOR: BUYER BEWARE!By: Jill C. McCrory
In the current buyer’s market real estate closings can move at lightning speed. But during the rush don’t let the adrenaline get the best of you. As the old adage goes – haste makes waste. Being aware of your legal rights and closing obligations can save you time and money. Do you know as a buyer what closing costs are your responsibility and which ones the seller pays for? Typically, if the buyer is obtaining financing, the buyer is responsible for all costs associated with obtaining the loan. This may include a lender’s title insurance policy, intangible tax on the mortgage, documentary stamp tax on the note, recording fees, mortgage closing costs, and various other lender charges. Your lender is required by law to provide you with a closing cost estimate prior to closing. Applying for and qualifying for a loan ahead of time will not only enable you to be a more attractive buyer because you are pre-qualified, but it will also enable you to know what costs are your responsibility so that you can consider them when negotiating a purchase price. Another cost to consider is the survey. The buyer is typically responsible for ordering and paying for a survey, which is usually required when obtaining a loan and which is always recommended even if you are paying cash. Because the surveyor must go out to the property and actually physically inspect the property, it may take some time to accomplish and therefore may delay your closing. Survey costs can range anywhere from a couple hundred dollars to a couple thousand dollars depending on the property and type of survey, so you will want to find out what this cost is as well as the length of time it will take to obtain a survey. If the seller has a valid prior survey, and the seller has not added to or subtracted from the structure since the date of the survey, then you may use the seller’s survey free of charge, provided the seller is willing to sign an affidavit at closing to that effect. Buyers also typically order and pay for inspections, which include wood destroying organism inspections and home inspections. Again, such inspections are typically required when obtaining a loan and are always recommended when purchasing with cash. You will want to have the inspectors lined up and the costs known ahead of time so that you may consider these fees. Also, missing an inspection deadline can be costly if an unknown defect arises later. Other costs which come into play, but which are typically paid for by the seller in Charlotte County, are documentary stamp tax on the deed and the owner’s title insurance policy. The documentary stamp tax on the deed is calculated at the rate of $0.70 per hundred of purchase price, rounded up to the nearest hundred. Title insurance is calculated at the rate of $5.75 per thousand for the first $100,000 in purchase price and $5.00 per thousand up to $1,000,000 in purchase price. For rates that are above $1,000,000, you will need to have those calculated by your title agent. In addition to the title insurance, there may be a closing fee, title search fee, and copy, courier, and mortgage satisfaction fees. As a buyer you are relying on the quality of the title insurance policy as well as the competency of the professional who is examining title, preparing the settlement statement, warranty deed, and other closing documents. Knowing your legal rights and obligations in a real estate transaction up front can save you time and money and can give you great bargaining power in negotiating a reasonable agreement and purchase price. Costs that can fluctuate within thousands of dollars can be a large factor in the value you place in the purchase price. While it may be exciting to ride the rollercoaster of the up and down real estate market, having a professional in the seat next to you may smooth the ride.
Our e-newsletters are on a wide range of informative
legal topics. |
 |
|
||
 |
|
||||
 |
|
||||
|
|
|
|
|
|
|