I assume most of you have their own home, that is why you might be able to give me an advice

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I am buying a small house not in the best shape but anyway. Never owed a house before.
The real estate guy is nice but how honest and smart he is - I don't know.
What do I have to do to handle this purchase as best as possible?
What I know is that
1) I pay a deposit, (couple of thousands) and then monthly installments. So, I need a contact for that and a receipt, right?
2) What do I need to make sure that I really get the house? I sign a purchase agreement for the house? Who prepares it? Who signs it?
3) I pay the real estate guy or the owner? Or depends?
4) I need title insurance? When is the best to get it? Same day, I purchase the house?
5) What about a warranty deed?
6) Do I have to go to local agencies to inform them that I am the owner? Do I have to sign papers with them?
7) How can I find out if unpaid taxes or lien or other stuff is on the property? And do I need an insurance against that too?
Did I forget something?
Joe
P.S. Thanks for the answers to the other thread with the noise reduction. Some gave good advice.
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You need a real estate lawyer and a mortgage banker. The two of them will do all the work. You'll just show up and sign papers (and checks!) at the closing.
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Because you are asking all these questions, you have established one or both of the following:
- You are not asking your real estate agent any or enough questions. Any RE person who can't answer most/all of the questions is incompetent, and you need to find another one.
- You need to ask 10 friends and/or coworkers which lawyer they used for their home purchase, and assuming at least one person says "Yeah - I liked the lawyer who helped me", you hire that lawyer. Prices will vary, but in upstate NY, the lawyer charged $400.00 for everything involved with my home purchase.
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|I am buying a small house not in the best shape but anyway. Never owed | a house before. | | The real estate guy is nice but how honest and smart he is - I don't | know.
he is sly and works for the seller
| | What do I have to do to handle this purchase as best as possible?
make sure the realtor makes your 1st offer known to the seller. they tend to negotiate for their own pockets.
| | What I know is that | | 1) I pay a deposit, (couple of thousands) and then monthly | installments. So, I need a contact for that and a receipt, right?
receipt for deposit...........always. it will be taken into consideration at the closing.
| | 2) What do I need to make sure that I really get the house? I sign a | purchase agreement for the house? Who prepares it? Who signs it?
sign P&S Agreement contingent on a home and pest inspection.
| | 3) I pay the real estate guy or the owner? Or depends?
depends on the circumstances.
| | 4) I need title insurance? When is the best to get it? Same day, I | purchase the house? | 5) What about a warranty deed? | | 6) Do I have to go to local agencies to inform them that I am the | owner? Do I have to sign papers with them? | | 7) How can I find out if unpaid taxes or lien or other stuff is on the | property? And do I need an insurance against that too? | | Did I forget something?
hire a lawyer
| | Joe | | P.S. Thanks for the answers to the other thread with the noise | reduction. Some gave good advice. |
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On Mar 25, 12:05 am, snipped-for-privacy@yahoo.com wrote:

Others have given good advice on mortgage broker and lawyer, but, I would add that you might want a separate property inspection to see what it might cost you to fix house that is "not in the best shape." Otherwise you could be buying a money pit.
Frank
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On 24 Mar 2007 22:05:12 -0700, snipped-for-privacy@yahoo.com wrote:

Your contact is the real estate agent. He will explain all the paperwork and procedures.

Legally, you take possession of the house immediately following the closing. Unless you pay for it in full the lender legally owns the house until your mortgage is paid. You and the seller can put whatever you want in the purchase agreement--the real estate lawyer makes sure everything is legal. Papers are signed at the closing. This is where real estate agent, seller, owner, lending agency, and lawyer are present. Each state has slightly different laws.

Ask him. I brought my (cashiers) check to the closing.

Maybe. I didn't feel like paying $1000.

You get that if you buy from a builder (new construction). Usually there are no warranties for a used house.

No. In fact, I asked my real estate agent to keep my sale private if possible.

The lawyer does the checking.

Termite inspection. House inspection is a good thing. A house will require lots of money and buying things you never thought you would have to buy; be prepared.
If you pay under 20% down you need to pay yearly mortgage insurance. Avoid it--why pay an extra $1000 per year?

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Yes, the real estate agent can explain things, but I wouldn't rely on a real estate agent, who is working for the seller, to explain contract terms and what is or isn't in my best interest as buyer. For that, as others have suggested, you should have a lawyer.

Make sure the contract is reviewed by your lawyer BEFORE you sign it.

In most parts of the US, this isn't true. The mortgage holder has a first lien on the property, but you in fact own it. If someone slips and falls, they are going to sue you as property owner, not the bank holding the mortgage.
You and the seller can put

Beyond what is legal, it's equally important that the contract be fair, or favorable to you as buyer. For example, you could sign a contract with no inspection or financing contingency. Perfectly legal, but very bad for you, if you're a typical buyer.

Typically the closing is handled by one of the attorneys, a title insurance company, or similar. They will tell you how much to bring and who to make it out to.

If you're getting a mortgage from a lender other than the seller, then you are definitely going to need title insurance to get the mortgage. And I think it's foolish not to get insurance anyway. It guarantees that you have clear title to the property. Without it, some party you never heard of could show up years later claiming that they have a lien or actually own the property, and the problem is yours.

No, a warranty deed is a basic form of deed, where the seller guarantees that he has clear title to the property being sold. It has nothing to do with a new home warranty.

Hmmm, how is that possible? Everywhere I'm aware of the deed has to be recorded. Besides recording and protecting your ownership, it also is how govts know who is going to pay tax on the property. As buyer, this step is normally performed by whoever handles the closing. You don't have to do it yourself. And usually there are some fees included in the closing to handle charges to get it recorded.

A title search is performed, usually by the title insurance company, who is engaged by your lawyer. And the questions about liens, taxes, etc is why you should have title insurance. Because if something is missed in the search and later surfaces, with title insurance, it becomes the title insurance company's problem to straighten out, pay, etc. Without it, it's YOUR problem.

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with just the name of an agent, who will then be expected to handle all the paperwork, and field any claims by people who break their legs on the property. Alternatively, you could buy it in the name of a trust, foundation, or business, which happens to be controlled by you. The municipality can certainly force the agent to reveal the ultimate owner, although they might need a court order to do it. --Goedjn THese days the hard trick is moving enough money to buy the place without having to do federal paperwork to show where the money came from and went.
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That will depend on what your mortgage company requires, *YOU* don't want title insurance at all. You just want the results of a title search. But if you're borrowing money from a major corp. You probably have no choice.

You're confused. A warranty deed is as opposed to a quit-claim deed. It's sort of like title insurance from the previous owner. With a warranty deed the seller is guaranteeing that he actually own all the property and rights that he's selling you. With a quit-claim deed, he's just selling you whatever rights he happens to have, and if someone else shows up with a land-grant from the king of france giving HIM ownership, that's your problem.
If you're buying land from a family that's been living there for 200 years, and you plan to die in place, there's not much to choose between. If you're buying the place and expect to sell it again on five years, a lot of people are more comfortable with a warranty deed. If there's any question at all about clear title, you want a warranty deed, because then the SELLER gets to pay for the court fight.
Goedjn
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So, say he buys the house for cash, with no title insurance. What happens when a couple years later someone shows up with a lien on the property that was missed during the title search? Or the spouse of the person who sold it to him shows up, saying the property was really theirs and the seller committed fraud, the deed that was filed wasn't real, etc?
The buyer needs title insurance, regardless of whether they have a mortgage or not.

No, you want title insurance, because then it's the title insurance company's problem and costs, to straighten out, not yours. Suppose the seller has moved across the country or even worse to another country, is dead, etc? How easy do you think it's going to be to recover anything from his "warranty deed" or get him to handle the legal problem? The warranty is only as good as the person behind it. Even if he's living across town, he could have no assets, be judgement proof, and just say "screw you."
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That's what the title search is supposed to find. The odds of the title search missing something that the title insurance will actually cover are extrememly low.
That's why title insurance is profitable.
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Supposed to is the operative word here. And a title search will only find what has been recorded. For example, suppose the seller was a crook and sold the same property to two other people at the same time. It can take a week or so for the title change to be recorded.

The same can be said of fire insurance. Should he skip that too?
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On 26 Mar 2007 18:39:50 -0700, snipped-for-privacy@optonline.net wrote:

If you can survive the loss without it, yes.
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But applying that to your property's title, who can survive the loss of that? It's not just the house, minus the contents, but the land too.
The title insurance premium is only paid once. Fire insurance, every year.
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wrote:

It's also a protection against a nonexistant threat.
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See below.

Why do you suppose the major corp. wants him to get title insurance?
In case he doesn't have good title and/or someone else challenges it.
That's the same reason the buyer should want title insurance.
Whether he wants to act as a self-insurer or not, one shouldn't tell him that there is no risk.
The title insurance company does a title search to lower its risk -- and I'm sure one can pay for a title search without the title insurance. The records are public. One can go back there himself, look in drawers, get copies made, etc. though I'm sure a newbie woulldn't find everything -- but there is still some risk in writing insurance, risk that they will have to pay out, because even a pro might not find everything, especially if it is not there.
Whether title insurance is more expensive for the risk than other insurance, I don't know, but I'm sure there are reports on that. If it was an especially good deal, why aren't there competitors selling title insurance for less? Even if the reports don't do cost/benefit, there must be figures on how many title claims are brought, and how many are successful, and maybe how much the legal costs are, on average.
One shouldn't bother insuring a 10 dollar, or even a 100 dollar package sent by mail**, because one can act as a self-insurer and the odds are he will make the same profit that the other insurer makes, and if not, he can afford to bear the loss.
One should only insure for losses he can't afford to bear, and the legal fees to defend a title claim, or the loss of the house are things most people can't afford to bear.
**Unless he believes the post office etc. will take better care of something that is insured, so he faces less risk of losing it in the first place. I don't know if they do or not.
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Because the corporate lender benefits from lower exposure at ZERO cost. Heh, why wouldn't you get ***** [anything] if you can strongarm someone else into picking up your tab.

Except that the buyer needs to balance the benefit against the actual cost.
Having said all that, I would not personally skip the title insurance. But that doesn't mean it isn't something of a scam -- it is. In CA at least, quite a few title companies have been clobbered by the state for some very shady dealings.
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snipped-for-privacy@yahoo.com wrote:

If the house is "not in the best of shape" I would get a *good* home inspector out to look at the house. Get your realtor to structure your offer so that it allows you room to renegotiate and/or back out of the deal if it turns out that he uncovers some issues of which you were not previously aware. It sounds like you're not 100% confident in your abilities and I don't mean that in a derogatory way, it just would be a good idea to get some professional input so you can estimate what work you need to do to get it in shape and estimate cost of repairs you don't want to do yourself.
Also keep in mind that there will probably still be one or two things that even he won't find...
good luck!
nate
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Very bad advice. By all appearances, the real estate agent he is dealing with represents the seller, not him. The agent is there to get the property sold for the seller and earn their commission. The one who should be structuring the purchase agreement that spells out contigency clauses to get out of the deal should be his lawyer, who represents his interests.
It sounds like you're not 100% confident in your

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I'm going to assume you're in the US.

As someone else said, he does not work for you, he works for the seller and is paid by the seller. You need your own inspector to find out what needs to be fixed.

You will need more than a down payment (what you call deposit). Things have changed since I have closed on a home, but there will be many more fees. You need to talk to a mortgage broker and get a truth in lending document.
If you put down less than 20% of the price of the house, you will have to get what is called PMI, private mortgage insurance. You can prepay that or pay for it every month.
I have never heard of anyone calling mortgage payments installments, it makes me think you really need to find out more about house buying before you sign anything.
You need to know what your property taxes will be. You'll have to pay utilities. Homeowner's insurance. The mortgage company will want some money in escrow for taxes and homeowner's insurance payments. Can you afford all of that?

You have a closing at which the house will be turned over to you. The lawyer will tell you who to make the checks out to.

The mortgage company will arrange for that before you close. The idea is to make sure the people you are buying the house from actually own the house and that their aren't any liens on it. You will pay the mortgage company for that, it's one of the fees I mentioned.

Off the top of my head, I can't think what that is.

I don't think you have to sign anything, and the mortgage company will have your tax bills sent directly to them. Ditto with your homeowner's insurance bill.

That is title insurance.

Don't fall for those interest only mortgages, if you can't afford the house with a regular mortgage, usually you should not be buying one.
Good luck, I hope it works out for you. Please get yourself a book or something on buying real estate. I know Consumer Reports used to have a good one, told you everything to look for when picking out a house, plus the ins and outs of getting a mortgage.
nancy
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