Monthly Archives: November 2016

CLOSING ON A HOME SALE IN DUBUQUE-WHAT BUYERS CAN EXPECT

If you finally found the home of your dreams at a price you can afford then congratulations!!  It is an exciting time for you and your family. Even though the seller has accepted your offer remember nothing is final until you go to the closing table and get a deed from the seller and make your final payment to the seller. And just like the seller, you need to jump through a few “hoops” before you Buying A Home - Closingcan make the journey to the closing table.

Pre-approval- Before you even start looking at homes contact your lender and get a pre-approval letter. It is our recommendation to use a local lender. Our experience is that the use of internet lenders or out of state lenders can cause huge problems when it comes time to close.

Disclosures- The seller should supply you with disclosures that are required by law. They should be complete and an honest representation as to the condition of the sellers property. If you don’t get a disclosure from the seller you can demand on at any time. See chapter 558.A of the Iowa code.

Loan application- Unless you are paying cash after you have a signed agreement with a seller immediately contact your lender and make an appointment to make a loan application. After you have made loan application do not make any major purchases (i.e. a car, wedding ring, etc.) and do nothing to jeopardize your credit score.

Pre-Approval For Home Buyers

Pre-Approval For Home Buyers

Appraisal- Unless you are paying cash for your new house your lender will require that you pay for a certified appraisal to determine that the value is in line with the purchase price. If the appraisal is in excess of the purchase price great!! But if it’s less, then you will need to make a decision as to how you want to proceed. You will probably want to negotiate with the seller. Maybe not; but if so (and you want to move forward with the purchase) you should be prepared to pay the difference between the purchase price and the appraised value.

Inspections- Order your inspections early. We always recommend that the buyer make their offers subject to inspections – whichever ones they feel are necessary. The decision is up to you. Most common are home inspection, Radon inspection, Pest inspection, and maybe a water quality (if on a well) and septic (if served by a septic system). By the way, in Iowa septic inspections are mandatory when certain properties are sold. I have yet to see a home inspection (even on new houses) that did not point out some defect or “condition” of the property. As a buyer you need to realize that pre occupied homes are not going to be perfect. What you should be looking for are big ticket items or items of safety. And remember a home inspection is just the inspectors “opinion”. They, like the rest of us, are not infallible. If you think a defect needs to be corrected you can require the seller to do that in order for you to proceed with the purchase. If they won’t, and will not negotiate with you, it will be your option to void the purchase contract.

Subject to sale- So you have found the prefect house but you can’t buy it without first selling your present house!!  Remember you are in a competitive environment. You may be competing with other buyers who don’t have a house to sell and therefore their offer will look better than yours  If you can entice the seller to accept your offer “subject to the sale” of your home most likely they will want to have the right to continue to show their home to other buyers and if they come up with another offer they will want the right to give you notice and then you will have a minimal time (usually a few days) to try to come up with the funds to proceed without having to sell your home. This can be a very involved process and you must exercise extreme caution. You need to make up your mind early in the game that if this happens, that’s just the way it is and then deal with it. You might lose a home or two if you need to make your offer subject to the sale of your house.

Your attorney’s opinion- Once all the contingencies on your purchase contract have been removed your attorney will “read” the abstract for you. He/she will issue a written opinion as to the quality of the title to the property you are buying. Noted on the opinion will be any liens, encumbrances, etc. that are a cloud on the title. You should read the opinion yourself and if you don’t understand anything ask. Any title objections should be cleared up prior to going to closing.

Deed- When you close you will receive a deed from the seller. This is the document that will pass title from the seller to you. The deed must be recorded at the county recorder’s office.

Final walk through- You should do a final walk through of the property just prior to closing. You will want to check the following at a minimum: 1. Is the property in reasonable condition? 2. If the seller agreed to make repairs etc. have they been made? 3. Has all personal property that was not to be left as part of the sale been removed? If he answer to any of these is “no” then contact the seller immediately and inquire as to why.

So there you have it. A synopsis of what is involved in buying and selling a home. For us, taking our buyers to view properties is the easy part. Actually anyone can do that. The critical part of real estate transactions is from the point where an offer is drawn up to the point the buyer & seller walk away from the closing table – both happy.

In this process listen to the advice you will receive from your real estate professional, your lender, your lawyer, and anyone else who might be involved in the process. Even though you hire all of these people to represent your best interests be proactive in the process. It will make for a much smoother transaction from beginning to end.

Are you planning to sell your home in order to purchase your new home. Then read our blog on closing on a home in Dubuque, a seller’s perspective.

If your are planning to buy or sell a home, or both, and looking for help, then contact American Realty of Dubuque. We’ll put you in touch with an experienced Realtor to help you with the process.

 

CLOSING ON A HOME SALE IN DUBUQUE-WHAT SELLERS CAN EXPECT

Buying/selling a home is a big event for both buyer & seller. It often represents a major change for two families. If you are about to close on a home purchase/sale, then you should be aware of what will take place. There are things both sides should know about closing a home sale in the Dubuque real estate market – and it’s best to know these things before the fact. This is what to know if you’re the seller closing on a home sale. To learn about what to expect when buying a home in Dubuque, click here.

SELLING A HOME IN DUBUQUE-

If you have sold your home then congratulations!! And if you have moved out of your home already then most of the work has probably been appropriately done. However, even though you may

Closing On A Home In Dubuque

Closing On A Home In Dubuque

have accepted an offer on your home, remember, nothing is final until you go to the closing table and you give the buyer a deed (which transfers title to your home to the buyer) and the buyer pays you the balance of the agreed upon price for your home. In the meantime there are a number of “hoops” that you will have to jump through in order to get to that point.

Disclosures- Be aware that as a seller you are required by state law to make a disclosure (for certain residential properties) to buyers as to the condition of your property. Also, there is a federal law that requires you to make a lead based paint disclosure if your property is pre 1978. Chapter 558.A of the Iowa code address disclosure.

Appraisal- Unless the buyer has agreed to pay you cash, and will not require that fair market value be established by an appraisal, the sale will most likely be subject to your home appraising at the agreed upon price. The buyer will pay the cost of the appraisal. If the property does not appraise (and the buyer is not willing to pay the difference) then you and the buyer  must negotiate a different price or the transaction will probably fall apart.

Inspections- There is a 99+ percent chance that your buyer will require inspections. Home inspection, radon inspection, pest inspection etc., and if you are on a well & or septic possibly

Closing on a Home In Dubuque

A Home Inspection Is Part of a Home Closing

those inspections also. In Iowa the sale of certain properties require a septic inspection. Without going into too much detail this is how it works. The buyer pays for whatever inspections they feel are necessary. If any of the inspections fail the buyer will probably ask you to make certain repairs etc. in order for the buyer to proceed with the purchase. If you are not willing to make the requested repairs etc., or negotiate them, then it is the buyer’s option to void the purchase contract.

Subject to sale- Sometimes in order for the buyer to proceed with the purchase of your home they need to sell their existing home to release their equity so they will have the down payment in order to obtain a mortgage loan and move forward with the purchase of your home. This can be  very involved and risky. In a nutshell what it means to you is that you will probably have the right to continue to market your home and if you come up with an acceptable offer from another buyer you give the first buyer notice and they have a certain length of time (usually a few days) to come up with the money to move forward with the purchase. If they cannot then your contract with them is terminated and you are free to proceed with the second buyer.

Buyer’s final loan approval- Even though the buyer probably supplied you  with a “pre-approval” letter from their lender before you start to think about closing you need to see a final loan approval (in writing) from the buyers lender. Be aware that in almost all instances the final approval letter will be subject to certain “conditions”.

Attorney’s opinion- Once all the contingencies on the purchase contract have been removed (in writing) then you can think about moving toward closing. The first order of business here is to have the abstract updated and sent to the buyer’s attorney so he/she can render their “opinion” as to the marketability of title. The opinion will point out all liens, encumbrances, etc. against the property. Unexpected liens etc. will have to be worked out to the satisfaction of the buyer’s attorney before you can close. Most sellers think their titles are clean. But, you would be surprised how many title problems come up when the buyer’s attorney reads the abstract. We rarely see cases where title objections prevent closing – but it does happen. Just a side note hereIf you were involved in a divorce and there were child support or separate maintenance payments required in the decree, if they have not been made or not made properly you probably have a potential title problem.

            Deed- Once all the above is taken care of you have your attorney prepare a deed and then you are pretty much ready to go to closing – or are you???

Final walk-through- Be aware that most likely the buyer will do a final walk through just prior to closing.  They do this for a couple reasons. First if you made repairs etc. as a result of an inspection to determine that they were made satisfactorily. Buyers also check to make sure if you were supposed to leave any personal property with the property that you did so. And finally they check to see that all other personal property has been satisfactorily removed as required in the purchase agreement. Can the final walkthrough be a potential problem? Yes it can. Here is an example (true) that happened to me a number of years ago. White or very light carpet. Looked great when the buyer made their offer. On final walkthrough the buyer noticed a rather large red stain (probably wine) in the living room that had been covered up by a rug the seller had down. Problem?? You bet!!  The transaction did not close.

Hopefully everything has gone right with your sale, then its a matter of scheduling a time with the seller’s mortgage company. The papers will be signed and then the process is complete.

If you’re buying a home after the close of your home, then read our next blog on closing a home in Dubuque – a seller’s perspective.

If you’re to the point where you’re ready to sell a home then you want to get a Realtor who can help you get the most value for the sale and knows the Dubuque market. Contact American Realty today to speak to one of our experienced Realtors. They can answer all your questions, including any you might have as you go through the process.