Buying and Selling a Home

Questions Frequently Asked About Buying and Selling a Home:

We just signed the offer; when can the movers come?

Generally when the buyer is getting an institutional first mortgage, the closing process should take eight to ten weeks (assuming there are no title problems). I would advise holding off on booking the movers for now, however, and wait to see if your transaction is indeed an average deal. The movers probably will not need much lead time, and you do not want to commit to a date you cannot honor.

Doesn’t the selling broker represent me as a buyer?

No. All brokers represent the seller unless they specifically are engaged as a “buyer’s broker.” You should have received a notice explaining this when you first began dealing with the broker in question.

Why can’t I take the chandelier and built-in bookcases?

In this world, there are only two types of property: real property and personal property. Real property is land and anything attached to the land. Personal property is everything else. Therefore, anything attached to a dwelling is a fixture and is part of the real estate. Fixtures are generally defined as things that are permanently installed. There are some things that are easily definable as fixtures, such as marble floors or paneling. Other things, like furniture are easily definable as personal property. The distinction is answered by the question, “will the removal of the item either affect the value of the property or cause damage by its removal.

Chandeliers and built-in bookcases are fixtures and attached to the property in such a way as to make their removal impossible without altering the property. If you wish to take them, they must be deleted from the purchase and sale agreement’s description of the premises to be sold, and any structural changes made must be remedied (i.e., the light fixture must be replaced with another, and the wall behind the bookcases repaired). For instance, once we represented a seller who had a crystal chandelier in his dining room and he wanted to take it with him. We made sure that this was clearly spelled out in the Purchase and Sale Agreement and the Seller replaced the crystal chandelier with another suitable light fixture. The rule is that the buyer gets what he sees — in the sense that the buyer won’t enter the property after he has closed, only to find that fixtures, walls, carpeting (wall-to-wall), etc. are removed.

Why can’t we move in early/stay on after the closing?

Because you do not own it yet/any more. If coordinating moving dates is a real problem, we can try to arrange for a use and occupancy agreement-but it should be in writing and address issues such as responsibility to insure, assumption of liability, possibility of damage to the property and a contingency in the event that the owner has to evict in order to regain possession.

Who gets the interest on the deposit?

That is a matter for negotiation at the purchase and sale agreement stage. While both parties feel the money is theirs pending the closing (and both have good arguments to support such statements: the seller’s being that the money is part of the purchase price and is held in escrow only as a matter of custom; the buyer’s being that the money is held in escrow until the seller performs by delivering a deed), I suggest that we split the interest in half. (Considering the attorneys’ hourly rate, why waste time haggling over a 4 percent return?)

What will our closing costs be?

It depends on the loan program offered by the lender. At a minimum, you should expect to pay one or two points; an application/credit report/appraisal fee of approximately $400, some of which may be prepaid; one year’s mortgage insurance (if applicable); and interest in advance for the balance of the month in which you close. In addition, the lender will collect the prepaid escrows for taxes (which when “netted out” against the tax adjustments will equal about three months’ worth), hazard insurance (usually for two months, based on the actual premium) and mortgage insurance if applicable (for two months, based on the actual premium). Depending on the lender and the program, there may also be charges for document preparation, a tax service fee, courier or overnight deliver, and transfer of serving charges.

The bank attorney will collect and disburse for recording fees; title examination; municipal lien certificate; plot plan; title insurance; and his or her fee.

Note: All costs listed above are approximate.

What is title insurance and do I need it?

It is a policy of insurance that protects the lender and, if purchased by the buyer, the owner of the property from claims against the title to the real estate. While attorneys must certify to buyers that the title to the property is good (if such certification is made to the lender), the owner will not be able to collect on such a certification if the attorney is gone or if the problem is one for which the attorney would not be liable, such as a forged document in the chain of title. In such an instance, the insurance policy would cover where the attorney would not.

What are “points”?

Points are fees charged to bank customers for the use of money. Although charged in many kinds of loan transactions, they are most commonly thought of in connection with residential lending (that is also the only loan in which the amount of the fee is regulated by state law: they are capped at one percent if the loan is not to be sold in the secondary market and at two percent if the loan is intended for sale). A point is calculated at one percent of the loan amount; thus, on a $160,000 loan to purchase a $200,000 house, one point would equal $1,600; one and a half points would equal $2,400; and two points would equal $3,200.

What is your fee and how do you arrive at it?

We usually charge a flat fee for the entire transaction, with the understanding that the fee can increase if problems arise.