To make any transaction with real estate in the US, the client must enter into a contract with a broker and a lawyer who has an appropriate state license. The parties sign a letter of intent expressing the seller’s previous desire to sell, and the buyer — to buy a particular house.
Such a letter is not a binding document until certain conditions are met, mentioned in it. For example, the buyer can indicate that the conclusion of a transaction depends on his ability to obtain a loan from the bank.
Choice of property
When the broker finds the property that the client would like to purchase, the customer must make an initial deposit of 2-3% of the asking price. After that, the buyer has the right to conduct a technical inspection of the purchased housing, but in the event that any serious shortcomings are discovered, you can refuse to purchase and pick up the first advance or negotiate with the seller on their removal or monetary compensation.
If the offer is accepted, the deposit is transferred to an escrow account — a trust account opened with a third party and intended to hold the funds of one of the parties to the agreement and the subsequent transfer of these funds to the benefit of the other party to the agreement upon the occurrence of certain conditions. Usually this is an account to which funds are transferred when signing a contract as a guarantee of future payment. Often, such accounts are used for trade transactions, and in addition, they can be deposited with funds to pay taxes and insurance premiums in the process of mortgage lending. The escrow account is opened in the so-called Title Company — a law firm acting on behalf of the seller.
If the buyer does not fulfill the terms of the contract for no apparent reason, the deposit goes to the seller. If the seller breaks the contract, the deposit is returned to the potential buyer.
Execution of the contract of sale
After the price is agreed, a purchase and sale contract is drawn up. The buyer receives documentation on the apartment (residence rules) for acquaintance with all the rules and instructions concerning the property. The buyer has the right to cancel the contract (within the time limit agreed in the contract, usually 45 days provided to the client for obtaining a loan) and receive a deposit back if he is not satisfied with the documents for the apartment.
Getting a loan
The next step is to get a loan for the purchase of real estate (if not planned to pay in cash). To provide the loan to the buyer, the bank requires a property inspection report from the licensed inspector and the appraisal report of the company-the licensed appraiser (to determine the validity of the selling price of the facility). Usually the cost for these procedures is approximately 600-800 dollars. If the buyer can not receive financing (loan from any bank), the contract is canceled and the buyer receives his deposit back completely — this item is included in the contract.
In addition, when the initial contract is signed, the seller can ask the buyer to provide a preliminary letter from the bank (Commitment Letter) that provides the mortgage.
Completion of the transaction and payment of commission
The last step is the formal completion of the transaction in the presence of a lawyer representing the interests of the bank that issues the mortgage. At this stage, the transfer of money and keys from housing. The transaction must be registered on the same day in a special district registration department. A few days before the deal is completed, both parties receive an official report that includes all payments related to the transaction: agency fees (usually for the seller’s payment), Title Company services (approximately $ 1,000-2,000).
Letting of the property for rent
Having bought a property, it is not necessary to use it for personal living. You can rent the property through a broker who has a license, which takes a commission of 10% of the monthly rent. The lease term and the rules for the use of real estate are described in the documents for the apartment. For example, not all houses are allowed to keep pets.