For Future Homeowners: What Makes a Real Estate Transaction Difficult
By: Tilden Moschetti
Proceeding to buy a house can be quite costly, especially when you take into account the down payment you have to make and the would-be monthly mortgage payment for the total amount that you will borrow. As such, before buying a house, first-time home buyers must seek legal help from experts. The home buying process can be quite complicated, and exercising diligence is necessary when entering negotiations involving buyers and sellers. Reliable legal representation is also important.
Several factors are considered before one can get a mortgage loan
For most homebuyers, a home loan from a mortgage company is necessary for real estate transactions to push through.
With a good credit score, a lender will likely approve the loan and the borrower will have several years to pay back the principal and interest owed. Note that this can be more difficult if the real estate property being bought is a vacant lot.
In this case, before one can build a home, an appraiser will visit the property, check the plans, and make an appraisal. After the home buyer closes escrow on the property, home mortgage companies will fund the loan and the buyer starts making monthly payments on this amount. Here, escrowed funds are crucial for the proceedings to continue.
An escrow fund is very important but the escrow process can be complicated
The services of an escrow agent or escrow company are beneficial for both the would-be homeowner and lenders that he or she would negotiate with. Before transacting a home sale and finalizing a purchase agreement, a mortgage lender would require money to be placed in escrow funds and held by a third party.
The actual escrow deposit would depend on several factors. Regardless of the amount, however, such will be held in escrow until both parties involved meet certain conditions. Escrow accounts involve a neutral third person or neutral third party, which gives all parties (both the home buyer and seller) an added layer of protection.
Earnest money is deposited by the homebuyer into an escrow account to show to the one selling real estate that he or she is serious with the home purchase and sale. This, however, sounds a lot simpler than it is. Our Calabasas real estate lawyers can help you walk through escrow instructions and explain the nuances of an escrow agreement.
Home purchase must be according to federal housing and state law
A trusted Calabasas real estate lawyer can give legal advice to a first-time home buyer or seller who is not familiar with real estate brokerage or is unsure how to proceed with homebuying after contacting a real estate agent or real estate broker. There is so much more to owning and buying a home than just knowing how much money you need to borrow given the agreed-upon purchase price, or making payments each month. On top of mortgage payments, real property tax payments, mortgage insurance premium, and other obligations that must be taken care of.
A reliable local attorney can likewise explain in detail funds in escrow, the escrow period, lender paperwork, monthly payment interest, good faith estimate, homeowners insurance policy, and closings. Remember that if the buyer reaches the close of escrow, he or she is closer to his or her new home. Closing escrow allows you to proceed with the next steps. After the closing process, once you settle whatever you are obligated to do so with the closing agent, and title company, the earnest money deposit shall be released. This is often applied to real estate closing costs.
For clarifications on the above or for questions on mortgage escrow payment, home inspector fees, contingencies, or real estate taxes and insurance payments, give us a call. Our hands-on Calabasas real estate attorneys can help with your real estate settlement and other processes.
At Moschetti Law Group, our practice serves the needs of Founders by providing real estate law and real estate syndication attorney services to Founders. Whether you are the Founder of a real estate empire or building a business and need assistance with purchase and sales, real estate transactions, or real estate litigation, we serve Los Angeles County, eastern Ventura County, and North Orange County from our office in Calabasas. We also have a primary focus on helping Real Estate Syndication Founders throughout the United States with forming their syndication, understanding crowdfunding, private placement memorandums, and operating agreements.