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Understanding the risks of going it alone at closings

On Behalf of | Jan 6, 2017 | Real Estate

Once a person or couple makes the monumental decision to look for a home to call their own, it initiates an often enervating process that can prove to be exhilarating and entertaining at times, and frustrating and even worrisome at others.

As physically and draining as the home buying process can be, it all becomes worth it once the person or couple locates the perfect place, sees their offer accepted and the closing date scheduled. Indeed, they are one step closer to seeing their dream become a reality.

It’s important for all prospective homebuyers to understand, however, that the closing is more than just a formality. Rather it’s a very important proceeding requiring the signing and recording of legally binding documents — drafted in largely arcane language — that will see both property and a considerable amount of money change hands.

In light of this reality, it’s important for prospective homeowners to understand what exactly they will be required to do at a closing.

First, they will be required to sign a purchase agreement between themselves and the seller that effectively transfers ownership and, unless they are able to purchase the home outright, sign a mortgage agreement between themselves and their lender outlining the terms and conditions of their home loan.

Second, they will be required to cover the various fees associated with securing a mortgage and transferring the property (i.e., closing costs and escrow items). This is typically accomplished by incorporating them into the principal balance of the mortgage or having them covered by the lender in exchange for paying a higher interest rate.

While this may seem fairly straightforward, it can rapidly become very confusing, particularly for novice homebuyers. As such, many experts suggest that anyone looking to finalize a home sale should strongly consider retaining the services of an experienced legal professional to protect their best interests.

Indeed, an attorney can carefully review the documents prior to signing in order to identify any potential problem areas, answer any questions the prospective homebuyers might have, and help ensure that the closing proceeds as anticipated.

If you are mulling the purchase of a home or have questions relating to another real estate matter, consider speaking with a skilled legal professional.