Are you going to be the sole owner, or are you buying the home jointly, either with your spouse or with one or more other partners? The name or names on the deed normally must be the same as those who are responsible for the mortgage.
Type of ownership
In the sales contract, you may already have specified the type of ownership interest. This is something you may wish to discuss with your real estate professional. The chief options are these:
- Sole ownership: You're the only owner.
- Tenancy by the entirety: Available only to married couples, both owners have to agree before the house can be sold or even refinanced. When one spouse dies, the house automatically goes to the surviving spouse without going through probate, the legal process by which property is distributed after someone's death.
- Joint tenancy: During their lifetimes, any of the owners may sell their interest to whomever they choose. When one owner dies, the surviving owner automatically gets the deceased owner's share in the property.
- Tenancy in common: The property is owned jointly, but if one owner dies, the deceased owner's share goes to the heirs rather than the surviving owner.
Homeowner's warranty
If you're buying a new house, you should receive a homeowner's warranty that protects you against certain defects in your home. Both the homeowner's warranty and a certificate of occupancy should be provided at closing. Without a certificate of occupancy, it's illegal to live in a newly constructed home. Recently, homeowner's warranties have become available for older homes as well, typically covering a repair of the major systems during the first year of ownership. If you are considering buying such a policy provided by the seller, look carefully to see which potential problems are covered and which are excluded.
Final walk-though inspection
Your contract should have included a clause allowing you to examine the property within 24 hours prior to closing. This allows you to make sure that the seller has vacated the house and left behind whatever property (such as appliances) you agreed upon. You can also make sure all conditions in the contract have been satisfied. Typically, the real estate professional (often both the selling and buying agents) will accompany you through your final inspection.
If the sales contract made the seller responsible for ensuring that the plumbing, heating, mechanical, and electrical systems are in working order at the time of the settlement, this is your last chance to make sure that everything works. During the walk-through, all remaining deficiencies should be noted. If they cannot be corrected before settlement, funds may be withheld from the seller by the settlement attorney for payment of the agreed-upon repairs. If during the walk-through you observe major problems or violations of the purchase contract, you have the right to hold-up the closing until they are corrected.
House tour with seller
It is wise, if at all possible, to make an appointment to tour the house room
by room with the seller — either before or shortly after the
closing. Come prepared with questions and a note pad. Undoubtedly, you'll want to find out the location for the following:
- Main cutoff valves for water and gas
- Emergency switch on the furnace
- Hot water heater thermostat
- Main electrical switch
- Fuse box or circuit breaker box
Bring along some sticky labels, so you can label the switches and cut-off valves.
Get familiar with the home
Does the seller know something about the history of the house? Are there old photographs you might copy? Are there wiring diagrams or plans for renovations that were never carried out? Who supplies the fuel oil? What day is the garbage picked up? Try to get the names and phone numbers of contractors and other professionals (electricians, plumbers, roofers, carpenters) who may have worked on the house and find out what they did and when.
What kinds of seasonal maintenance did the seller do? Are there trees that require pruning, or plants that require special care? Be sure to find out where the cutoff valve is for any outside faucets. If you're lucky, the seller will remember to tell you that the outside faucet may freeze if you don't drain it before winter. (And yes, it may actually freeze briefly during the night in parts of Pinellas County during January and February).
Final estimate of closing costs
Keep in mind
The loan origination fee is typically 1 to 2 percent of the loan amount.
A credit report fee costs anywhere between $16 to $50.
In times past, buyers dreaded closing day because they were frequently hit with hundreds or even thousands of dollars in unexpected closing costs. Today, the situation has changed for the better. You will know in advance exactly what costs you will be responsible for and approximately how much they will add up to.
The lender is required to give you an estimate of closing costs soon after you have filed your application for a loan. Since these estimates are subject to change, you have the right to inspect the settlement form (called the HUD-1 Statement) one business day before settlement. It is useful to do so because you will probably be required to pay the remainder of the down payment (minus the amount of your earnest money deposit) and closing costs with a certified or cashier's check. A personal check may not be accepted.
If you need help with closing costs
For many prospective home buyers, coming up with the required closing or settlement
costs can be difficult. For this reason it's important to consider your potential
settlement fees before you make your purchase offer. As we discussed here,
it also pays to shop for competitive pricing for as many services as possible
and to negotiate with the seller as to who will pay what costs.