Q. Must I have a real estate agent?
While there is no legal requirement to involve a real estate agent in the purchase transaction, the services he or she provides can be very helpful and can make the entire process smoother. A realtor can provide expertise regarding neighborhood, pricing, contract negotiation and terms, and can act as an intermediary between the buyer and seller. Realtors usually receive from the seller a commission based upon the sales price of the property. Nevertheless, a buyer’s agent owes a duty of loyalty to the buyer.
The contract is the final written agreement binding both the buyer and the seller regarding all issues surrounding the purchase and sale of real property. The contract may contain contingencies that permit a buyer or seller to cancel a sale if certain conditions are not met after the contract is ratified. Loan approval, sale of a current residence and home inspections are examples of contingencies. The approximate closing date and the selection of the closing agent are usually contained in the contract. All contracts for the purchase of real estate must be in writing.
Q. What is the closing?
The closing, or settlement, is the meeting of the buyer and the seller during which all of the documents necessary to transfer ownership of the property to the buyer and to place the loan on the property are executed. At the settlement, the buyer is expected to deliver to the settlement agent the funds necessary to complete the purchase. Closings typically occur at the office of the settlement agent.
Q. What does the settlement agent do?
The settlement agent orders a title search and survey (map) of the property and reviews them to detect any title problems or encroachments that may affect clear title to the property. The settlement agent coordinates the closing date with the lender, the seller, the real estate agents and any other parties necessary for the closing. The settlement agent conducts the closing, confirms the status of tax payment on the property, arranges for the release of all of the seller’s mortgages on the property, records the necessary documents in the public land records and arranges for the issuance of title insurance to protect both the buyer and the lender. The settlement agent collects all funds and disburses them to the appropriate party.
The buyer has the right to select the settlement agent. The selection of the settlement agent usually is specified in the contract.
Q. What qualities should be considered in the selection of the settlement agent?
The buyer should consider the experience of the settlement agent, his or her knowledge of the law in the jurisdiction where the property is located and his or her reputation for competence and responsiveness. The buyer should make certain that the lender and the settlement agent have a strong working relationship. The buyer should also consider if the purchase will require the settlement agent to have familiarity with the special laws that affect foreign buyers and sellers.