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The Home Purchase Process: Who Pays For What?

As the escrow process begins, the buyer and seller are responsible for certain costs, but is there any flexibility?

It costs money to buy and sell a home. No, we’re not just talking about the cost of the home itself, but also the costs incurred with insuring the Closing coststransaction is conducted correctly and in accordance with state and federal real estate laws. While buyers and sellers may view these facts with a bit of disdain, it’s important to understand that a real property purchase comes with liabilities unlike any other type of purchase many of us may encounter during our lifetime.

Before you balk even further, think about this: Without the professional escrow and other affiliated services objectively looking out for buyer and seller interests during the home purchase transaction, what would you know about:

The actual value of the home you’re buying or selling?

As a buyer purchasing a home with a mortgage, your lender will require an official appraisal by a licensed, experienced property appraiser. This protects not only the lender’s interest, but both the buyer and seller as well, by making sure the home’s value isn’t too low or too high for the selling price. Yes, everyone is protected!

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Whether the home’s structural integrity has been compromised by wood-destroying pests?

There’s a strange thing about termites and other wood-destroying pests: They can do their damage long before you’ll actually see any physical results. In most cases, homeowners may not even realize their home has been infested with these pests. So what would happen, once you’ve taken possession, and you find out after the fact that termites have threatened parts of your home? Again, these professionals are in place during the escrow process as a proactive measure to make sure the home you’re buying is truly ready to inhabit…and not by destructive insects!

The legal chain of ownership of your home?

Imagine you’ve moved into your home, and weeks, months, or even years later someone knocks on your door claiming THEY are the actual owner, and that their grandfather was the original owner of the property and had willed it to the stranger now standing in front of you.

OR…Your new neighbor approaches you and tells you your fence is 2 feet into his property line.

How would you fight these issues? Fortunately for you, title insurance is in place to help settle problems like this and others.

These are a few examples of the importance of closing costs.

Indeed, closing costs may not be your favorite part of the home purchase transaction, but they are necessary for the benefit of both buyer and seller. Closing costs may be negotiated as to who pays what, and each transaction’s set of negotiations may be unique with regard to the circumstances of the listing. If you have more questions, contact Montemayor & Associates by calling either of the numbers listed at the top of this page, or by using the Quick Response form below.

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