Featured News 2014 Preparing for the Paperwork at Escrow

Preparing for the Paperwork at Escrow

As the home buying process finally nears to a close, there is still much that needs to be done, especially addressing a great deal of paperwork. Before you are faced with this flurry of documents, you need to be aware of what paperwork you would be reviewing and signing in the real estate transfer, home loan, and more. Read on to get a glimpse of what escrow will mean for you, either as a seller or a buyer.

The exact paperwork you may encounter can vary according to the state and county, but here are some of the real estate transfer documents you can expect to see, documents that a seller must sign and hand over to the buyer to examine. First of these papers is the deed, the legal document that officially gives the property over to the buyer from the seller. The exact wording will depend on a state's laws, but the buyer can choose the type of ownership they want, individual, in trust, in joint tenancy, etc. This deed will go to the county recorder, and it will be made public.

Then there is the bill of sale. This should officially transfer personal property from the seller to buyer, as well as outline the personal property that is being transferred. The personal property would include such items as air conditioners, appliances, light fixtures, security systems, cable or dish TV equipment, etc.

Again the words will differ from state to state in the affidavit of title or seller's affidavit. This statement is the seller's sworn and notarized statement that says that the seller is the property owner, and it should detail any of the title defects the seller is aware of, which could include leases, liens, boundary line disputes, etc.

In a good deal of states and counties, there are taxes on real property transfers. The transfer tax declarations are signed by both buyer and seller, and these declarations state the price for which the property was sold and the tax stemming from this transfer.

Another document that needs the signatures of both the buyer and seller is the buyer/seller statement. This is where all financial transfers between those two parties are listed. These transfers include the actual purchase of the property, the down payment, brokers' commissions, attorney fees, escrowee fees, title insurance fees, and a great, great deal more. The escrowee will then take this document to craft the HUD-1.

The HUD-1 is a settlement statement that is necessary for every closing with a lender that is insured by the federal government, per the Real Estate Settlement Procedures Act (RESPA). This statement includes not only all the information that is already in the buyer/seller statement, but it also discloses all monetary transfers throughout the whole closing process among everyone involved.

Of course, there could very well be more paperwork to deal with in the transfer. Then there are home loan documents and additional paperwork related to the title. The documents you face for a home loan will depend on the type of loan you are taking out as well as on the lender. But you can expect to get written proof of your loan debt, the terms of the loan, and stipulations on how the lender can transfer or collect debt in the note. It will have other details about the loan on there. Should the lender sell your loan, the buyer will get the physical copy of the note. This document has intrinsic value, almost like a check does.

Then of course, there is the mortgage. This is the document where the buyer says the loan will be secured by the property, that is, that the real estate will be collateral. This means that a lender can initiate foreclosure proceedings if the buyer cannot pay off the loan.

Then there is the loan application itself. The buyer has the initial form to fill out, then the lender will give a new form to the buyer to review. It is imperative that the financial information on the application is accurate and up to date, otherwise, the buyer cannot sign until the lender fixes the information.

The Truth-In-Lending Disclosure should tell the buyer such things as the annual percentage rate, finance charges, total payments and more.

There could easily be more affidavits and disclosure papers involved with the home loan, and the paperwork would still not be over. More complicated still are documents related to the real estate title, courtesy of the title company and the escrowee. The title insurance commitment will, among other things, list liens or any other issues with the title. A real estate attorney can examine the Commitment to ensure that the title is in the condition stated in the contract. If there are any problems with the title, this could prolong the closing process or bring it to a stop. And then there would still be additional closing documents from the title company that a buyer would have to sign.

This really only scratches the surface of what you would need to prepare for in escrow. While further research can help prepare you for this involved process, it would be in your best interests to be prepared by having a legal expert on your side, one who is familiar with local laws and all the technical aspects of the paperwork being thrown your way. Find the experienced real estate lawyer you need on our directory today!

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