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You've finally found the perfect home at the right price in just the neighborhood you wanted. And while you're probably anxious to make the big move into your new home, there are several important matters to take care of between the day your offer is accepted and the day you take possession.
Before you start packing the boxes, make sure you have completed the following tasks:
— Final home inspection. Examining your property with a fine-toothed comb is the only way you'll know exactly what kinds of flaws you might have to deal with once you've moved into your new home. Your home inspector will report on the condition of the structure and systems of the house, such as plumbing, electrical, foundation, heating and air conditioning, dry rot, boat docks, sea walls and pools. You may need to hire additional inspectors to check for termite damage and to inspect your roof.
If the inspectors you hire find problems with the property you're under contract to buy, the seller does not necessarily have to fix everything reported. Those items then become a matter of negotiation. Of course, your purchase contract must address your rights to negotiate, or you can't do anything. That's why it's often helpful to have your real estate attorney review your contract before you sign it.
— Secure title insurance. Should something in the property's history threaten your ownership rights, title insurance protects you and the lender and ensures the house is legally yours. Title insurance secures your legal claim to the property and protects you against title "defects" — legal rights to a property claimed by somebody else.
To get a mortgage you'll have to buy a lender's title insurance policy to protect the lender against title problems; however, owner's title insurance will protect the buyer's interest as well. Check with your real estate attorney about title insurance; he or she is trained in the complexities of real estate law, and is best qualified to issue your policy. The one-time fee for title insurance is the same with or without a real estate attorney, and is usually due at closing.
— Get homeowner's insurance. Mortgage lenders insist on homeowner's insurance, not only to protect their investment, but yours as well. Shop around for the best coverage and rates. As a rule of thumb, it's best to purchase the most comprehensive coverage possible. You can cut the costs by taking a higher deductible.
All policies are different, but items typically covered by homeowners insurance include your home and garage; living expenses, should damage to your home cause you to have to leave the premises; and personal possessions within the home and on your property.
Florida homeowners who live near the coast or any flood-prone area are also required to have flood and/or windstorm insurance, which also covers damage or loss due to hurricanes.
Be sure to keep a list to help you keep track of all the hoops you're jumping through during the pre-closing process.
— Finally, keep a checklist of critical events and dates leading up to closing day. This list will help you stay on top of the many steps involved in the closing process, and should contain dates for the following:
Sign purchase contract
First deposit due
Apply for mortgage
Date by which mortgage commitment is due
Written notice to seller of mortgage acceptance
Second deposit due
Home inspection deadline
Notice of problems identified during inspection (and cost estimate) due to seller
Seller's response to buyer's notice of inspection due
Termite inspection completion
Termite damage repair cost estimate due to seller
Title examination
Title commitment due to lender and buyer Survey ordered
Homeowner's insurance
The days and weeks leading up to the closing are busy ones, and can be stressful. But by creating checklists and systems relating to each event, the stress can be reduced and you can ensure you fulfill all of your commitments.
Charles J. Kovaleski is president of Attorneys Title Insurance Fund Inc., (The Fund) the leading title insurer in Florida and the sixth-largest title insurance company in the country. The Fund has been in business for more than 50 years and supports a network of more than 6,000 attorney agents statewide who practice real estate law.
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