Purchasing a new home means countless hours signing agreement papers – some might say a novel-length book – before the home can be transferred to the new owner’s name. Even though the process is overseen by state and local agencies which regulate the sale of homes and may be facilitated by a real estate agent, there are some steps in the purchasing process that can save you a great deal of anguish later on.
Regarding the inflation or verification of the price of a home, many new homeowners wonder about the value of having a real estate appraisal. A real estate agent may run a comparative market analysis (usually abbreviated as CMA) for prospective buyers that shows recent home sales data and helps a buyer determine a fair price, but a CMA is not an appraisal.
Because most buyers cannot afford to purchase a home outright, the bank must guarantee that the home is worth the asking price. A real estate appraisal is that guarantee for the bank. The bank will only accept a certified appraisal, as it is their ?insurance? that the home is really as valuable as the selling price. It’s a form of validation not only for the bank but also for the buyer concerning the true value of the home.
A title search is another cost that stands out on the closing cost statement. A title search is performed by a title insurance company, which may seem like an odd concept, since most people don’t relate a title search with insurance.
Who owned a piece of property before the new buyer is the subject of a title search. Prospective owners need to be assured that the home they are purchasing is indeed owned by the selling party with the proper credentials to sell that property. Insuring that the ownership claim is valid is the result of a title search by a title insurance company. No buyer wants to be scammed or dealt with fraudulently when buying a home.
An optional closing cost, home inspections can often be very valuable for the new buyer, as issues discovered during the inspection can be negotiated as fixable items before the sale is final. A home inspection typically doesn’t cost a great deal, but it may uncover some very costly repairs if the house is accepted as is. Once the sale is closed, it can be near impossible to require the previous owner to perform the repairs, so performing a home inspection with a qualified inspector – not just a handyman – can save a substantial amount of money.