You and the Seller
Must Agree
Buying a home does
not occur in a vacuum, involving only you and the seller. There
are all kinds of people and services involved behind the scenes
to make it happen. Since some of these services affect both you
and the seller, there will have to be be agreement on which companies
you will use for them. When you make your offer, you should
request your favorites for these services. If you are unfamiliar
with these service providers, you can get recommendations from your
agent.
Escrow
and Settlement
For example, you are
going to need an escrow or settlement company to act as an "independent
third party" between you and the seller. Without having a third
party involved, how do you know that when you fork over the money,
you are going to get the deed? This is the type of service provided
by escrow and settlement. They will hold your deposit and coordinate
much of the activity that goes on during the escrow period.
Since this third party
is very important to both you and the seller and both of you will
pay fees to this company, it is important to agree on which service
to use. Therefore, your choice should be part of the offer. Since
you do not buy a home every other week or so, you are probably unfamiliar
with companies that provide this service. Your agent will make a
recommendation. You have the authority to accept this recommendation
and include it in your offer, or make your own choice.
Keep in mind that the
seller will also have a preference and this may be a point of negotiation
in a counter-offer. It has become customary that one side will choose
the escrow/settlement agent and one side chooses the title insurance
company. Even so, everything in real estate is negotiable.
Title
Insurance Company
Title insurance is
important because, by providing you with an Owners Policy, they
insure that you have clear title to the property. If there are any
problems later, you can always go back to the title insurance company
and have them clear it up. Since it is customary for the seller
to pay for the owner’s policy, they have an interest in which company
is used.
However, you are going
to pay a fee to the title insurance company, too. This is for the
Lender’s Policy. The lender’s policy insures your mortgage lender
that there are no liens or judgments against the property and that
the mortgage will be in first position. In other words, should you
sell the property or refinance it, their mortgage gets paid first,
before any other claims against the property.
The lender’s policy
is less expensive than the owner’s policy.
Termite
and Pest Inspection
As part of your offer,
you may require a termite and pest inspection. This company not
only inspects for termite damage and pest infestations, but also
inspects for dry rot and water damage, among other things. The company
that performs the inspection is important to you as a buyer, because
you want to be sure they do a good job. It is important to the seller
because it is customary that they pay for the inspection and some
types of repairs that may be required.
You should determine
which company you want to perform this inspection and make it a
part of your offer. Otherwise the seller will choose. If you do
not know which company to hire, your agent will make a recommendation.
copyright 2000 by Terry
Light and RealEstate ABC |
