3 Tips for a Successful Residential Real Estate Closing Process

Whether you’re buying or selling a home, closing day is the most important day in the process. It’s the day you’ll take or relinquish ownership of the property. To ensure a successful closing day, you’ll want to handle the closing processwith care.

You can expect your real estate closing to take approximately two hours. You can also expect multiple parties to be involved, including a closing agent, your lender and your realtor (if applicable). To ensure a smooth closing process, here are some tips.

1. Do Your Due Diligence

If you’re a buyer, make sure you understand what you’re purchasing. Conduct a final walkthrough of your property to confirm there are no repairs still required or additional property issues. Look over your purchase agreement to ensure everything is as promised.

If you’re a seller, complete all necessary repairs as far in advance of closing as possible and make sure you’ve prepared the home well for its new owners.

2. Prepare Documentation & Payment in Advance

You’ll need some documentation on the day of your closing, including a photo ID and any outstanding forms for the title company or loan officer. You’ll also need the payment for your closing costs depending on your financial responsibility. 

In most cases, you can use a cashier’s check made payable to the closing company. Prepare your closing documents and payment in advance to ensure a faster closing process.

3. Consider Hiring a Real Estate Attorney

Although Texas doesn’t require you to have a real estate attorney when buying or selling property, real estate transactions are often complex. And sometimes disputes can arise during the closing process. An attorney can act on your behalf in the event of these disputes. 

For example, there might be something in the purchase agreement that wasn’t there before. You’ll want an attorney by your side to ensure your rights are protected as a buyer or seller.

Buying or Selling a Home? Reach Out to Lonergan Law Today.

Are you ready to buy or sell a home? Or are you worried about the closing process? The team at The Lonergan Law Firm, P.L.L.C. can help. To learn more about the closing process or to schedule a consult, give us a call at 214-760-6768 or send us a message.

Common Title Issues in Residential Real Estate Sales

A clear title is a critical part of any residential real estate transaction. Simply put, clear title means that the seller has the legal right to pass on the property to the buyer.
To verify that a title is clear and free of “defects” or “clouds,” a title company or skilled real estate attorney does a title search. The attorney determines that the real estate title is legitimate, as well as in whom the title is vested, so the buyer can be confident that they are the real estate’s legal owner.

Common Issues Affecting Clear Title

The title search includes searching for potential issues that limit the seller’s ability to pass the title to the buyer. These include things like outstanding mortgages, judgments, restrictions and other encumbrances against the property that may affect ownership. Here are some of the most common issues residential real estate buyers encounter.

Mechanic’s Liens

Mechanic’s liens are liens placed against the property by a general contractor or someone else who has helped improve the property. Contractors place liens against the property to help ensure they get paid, and the lien is intended to be released when the job is complete. However, sometimes contractors fail to release the lien, either because of a paperwork error or because they were never paid. When a creditor has filed a lien on the home against a seller, it prevents the seller from selling the home.

Divorces and Family Disputes

Family dynamics can also cloud an otherwise clear title. For example, a couple purchases property together and then later divorces, the ex’s name sometimes remains on the deed. The ex’s name must be removed from the deed before the seller can pass title to the buyer.
Children who inherit a property can also cause title issues when not all of them agree to sell it. Your attorney can help negotiate the purchase with the remaining siblings who inherit a share of the property.
Finally, past due child support or spousal support can also lead to liens that prevent a seller from transferring property rights to the buyer.

Financial Issues

Financial issues can also prevent the transfer of clear title from a seller to a buyer. When a seller has failed to pay taxes, a lien can be placed on the property. The tax issues must be resolved before the sale is final.
Bankruptcy can also cloud a title. When the seller has been involved in bankruptcy proceedings, it may be necessary to petition the court to release the property from the bankruptcy process.

Contact an Experienced Real Estate Lawyer for Help

Any title issue discovered needs to be resolved so that the seller can pass clear title on to the buyer. That’s just one of the reasons it’s important to have an experienced real estate lawyer on your side.
Your lawyer can help you discover potential issues and resolve them quickly so that you can sell your home or purchase the home of your dreams without worry. To contact one of the real estate attorneys at the Lonergan Law Firm P.L.L.C. call 214-760-6768214-760-6768.

What Is a Short Sale and Is It the Right Choice for You?

Have you found yourself in a severe financial bind, unable to pay your mortgage? You’re not alone. A study completed by Harvard has shown that 38 million households can’t afford their homes. Going through a foreclosure isn’t your only option, however. A short sale can benefit both you and your lender while helping you get back on your feet faster.

What Is a Short Sale?

A short sale occurs when real estate property is sold for less than the whole amount owed on the mortgage. Short sales are typically considered before foreclosure when a homeowner is behind on mortgage payments. A short sale can also occur when the housing market decreases, leaving behind a house that is now worth less than the mortgage balance.

The Benefits of a Short Sale for Your Property

Although a short sale can take some time—up to a year in some cases—there are some benefits to pursuing it, for both the homeowner and the original lender.

• Homeowners can avoid foreclosure: Short sales are voluntary and don’t have as many consequences as forced foreclosure. Foreclosures can keep homeowners from securing another mortgage for up to seven years and are damaging to their credit.
  
• Lenders can get back what they gave: During a short sale process, lenders can receive most of the original loan through the sale of the property. Other options such as foreclosure require a more expensive process.
  
• Financial flexibility: You could benefit from greater financial flexibility with a short sale. Often, homeowners are not required to make mortgage payments while undergoing the short sale process, benefiting those who are under major financial stress.
  
• Exit the property with dignity: As a homeowner, you’ll benefit from knowing you sold your home, instead of having it taken from you forcefully. You’ll also keep foreclosure from being a part of your credit report.

Is a Short Sale the Right Choice for You?

For a successful short sale, it’s important to hire someone to help you navigate the intricacies of the process. If you’re considering selling your home as a short sale, consider speaking to a professional short sale attorney. To learn more about the short sale process, send us a message.

Understanding Owner-Financed Real Estate Transactions

Owner-financed and “seller-financed” generally mean the same thing. Owner or seller financing is a substitute for obtaining a traditional mortgage from a lender to buy a property. Instead of a bank or mortgage company financing your purchase, the seller—the person from whom you are buying the property—will act as the bank or the lender.
You will sign a legally-binding contract with the seller to make the payments on the property. The lender will record the contract with the local property recording agency, as the bank would do for a mortgage.

Why Would a Buyer Want to Finance a Purchase This Way?

The most common reason a buyer would benefit from financing a real estate purchase this way is because the buyer is not able to qualify for traditional mortgage financing. Buyers can have difficulty when:

• Their credit score is not high enough or they can’t make a large enough down payment for a traditional lender.
• They have had a bankruptcy or foreclosure in the past and need to wait a few years to qualify for regular financing.
• They or their spouse are temporarily unemployed or have a pending job offer.

Also, depending upon whether the current market is a sellers’ or buyers’ market, buyers may be able to get a lower interest rate than they could with a traditional bank.

Why Would a Seller Offer to Finance Your Purchase?

Sometimes, in markets where interest rates are high, or there is too much housing inventory on the market, sellers find it difficult to sell their homes. Rather than continue to wait for markets to adjust or the perfect buyer to come along, sellers will offer to finance the sale for a certain time period. The seller benefits because:

• The seller can get the house sold sooner
• Sellers benefit because they collect the interest on the loan they make to the buyer
• The seller may be able to sell at a higher price and require a higher-than-market interest rate, knowing that you can’t obtain traditional financing

What Are the Risks?

Buyers take on more risk if they buy this way, rather than use a traditional mortgage to finance the purchase:

• If the buyer misses a payment or is late, you don’t have the same foreclosure protections that you’d have with bank mortgages.
• The seller can immediately call the loan due for breach of contract without going through traditional foreclosure proceedings
• Your landlord could evict you immediately
• If you have made any improvements to the property, you could lose any money you spent to make the improvements if you violate the terms of the loan
• In most situations, the seller can legally keep the entire amount of your down payment AND take back the house
• If the seller is paying a mortgage on the house, fails to pay it even after you make your payment, then you could lose the house for the seller’s default
• Title insurance will not cover every title or fraud issue
• You will likely be paying a higher price for the house in the long-run, a higher interest rate and make large monthly payments

Get Answers From a Knowledgeable Attorney

Before getting into any kind of seller-financed or “contract for deed” buying arrangement, please consult with us. It’s extremely important to us that no one takes advantage of you. It’s best if we can review your transaction before you sign anything. Contact us online for more information.