#6. Ask for Title Search and Insurance
Title insurance protects real estate owners and lenders against loss or damages that might result from preexisting liens, encumbrances, or defects in the title. Each title insurance policy is subject to specific terms, conditions and exclusions. Auto and homeowner’s insurance protect against potential future events and are paid for with monthly or annual premiums. A title insurance policy insures against past events for a one-time premium paid at the closing of the escrow. Title defects include another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements, and other items that are specified in the insurance policy.
#7. Conduct a Home Appraisal
A home appraisal determines the estimated market value of what is soon to be your property. The appraiser calculates value based on general condition, geographic location, proximity to objects of interest, value of nearby houses, recent sales, and neighborhood growth and potential for growth, among other factors. Mortgage lenders use this information to make sure the amount you borrow is supported by the home’s value. There is always a risk of a low appraisal, though. In that case, the lender will not go through with the transaction at a price based on a higher presumed value. The seller might adjust the sale price accordingly, but also might not. Appraisal value is not a binding figure — what the seller sells for and what the buyer pays determines the sale price. It might be that you already negotiated a deal with the seller for a price lower than he initially wanted. This is often the case when the home is
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