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 estimatedmarket 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 selling in a buyer’s market and its location in a declining market area has forced the seller to accept a lower value than they might prefer. The further drop in price suggested by a low appraisal may slow or disrupt the closing process while further negotiations are conducted. #8. Set the Time and Date of the Closing The closing date is a negotiable factor during the offer and acceptance phase of a home sale transaction. When making an offer, the buyer will include a closing date and, depending on the seller’s circumstances, it may be acceptable or may be countered with other terms. Don’t choose a date casually. The right date can ensure a smooth closing and reduce closing costs; the wrong date puts the homebuyer at risk of not closing on time, needlessly complicating the move, increasing expenses, and even losing your new home.
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