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All suggestions and ideas herein are based
on the expertise and experience of J. Byron Wyndham & Associates
Law Firm in the practice of Georgia law. Please note that real
estate is unique to each state and country. The ideas and
suggestions expressed here are based on the traditional method
of handling real estate transactions in the State of Georgia.
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Choosing a real estate agent.
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What price house can I afford?
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Who pays the closing costs?
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What other costs do I have?
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What do I need to bring to closing?
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What if I have questions?
CHOOSING THE REAL ESTATE AGENT
Select a professional real estate agent. Do not hesitate to
interview the agent, or several agents. Remember that word of mouth
recommendations of agents are the best source. Feel free to ask
about the agent’s experience in the industry. They are selling
themselves and should welcome questions.
Clarify the representation and the method of payment. Many agents
that work with buyers do so as "Buyers Brokers". They work only for
the buyer and represent the buyer’s , not the seller’s interests.
Discuss the method of payment BEFORE HAND and have any compensation
agreement in writing!!
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WHAT PRICE HOUSE CAN I AFFORD??
The real estate agent can work with you to determine your price
range. Ability to make a certain payment depends on many factors,
including debts, income, job prospects, marital status, etc. Your
real estate professional factors these variables every day and will
assist in your decision.
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WHO PAYS THE CLOSING COSTS?
Closing costs are negotiable between the buyer and the seller. Your
real estate agent will look at many factors and discuss these costs
with you. Sometimes the seller will be motivated to make a
contribution on costs to help the purchaser buy the house. If there
are many offers, a seller will not offer to pay any costs.
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WHAT OTHER COSTS DO I HAVE?
a. Prepaid Item
These are things like mortgage insurance, your home insurance
and interim interest. You must pay these "up-front" at the
closing and, depending on your type of loan, the costs can be
significant. Your real estate agent and your mortgage
professional will help anticipate these costs in advance.
b. Escrow Items
Most lenders require that you have an escrow account. These are
funds set aside in advance to pay for your taxes and insurance.
The "up-front" amounts will vary depending upon when you close.
Escrows are calculated based on costs of the insurance and the
taxes. The amounts collected in advance will depend on when the
annual costs are due.
c. Pro-rated Taxes
Taxes are prorated between the parties at the closing. The
purchaser is required to place funds in escrow to pay the taxes
when they are due. The buyer will be reimbursed by the seller if
the taxes have not been paid for the current year. The buyer
will have to re-imburse the seller if the seller has paid the
taxes for the current year. The credit or debit appears on the
front page of the closing statement.
The bottom line is "How much TOTAL will I need to buy the
house??"
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WHAT DO I NEED TO BRING TO THE CLOSING?
a. Insurance Policy
You need to insure your home against fire, disaster and other
hazards. Your lender will require that you have the policy at
closing. The coverage MUST equal the value of the LOAN which you
are getting to buy your house. You must let the closing attorney
know the annual premium in order to compute your monthly
payment, which has escrows set aside to pay the insurance in the
future. The first year premium must be paid by you in advance.
b. Cashier's Check
By Law, Attorneys in Georgia may not accept personal checks for
closing. Your agent, Loan Officer or Attorney will be able to
estimate in advance the amount you will need for the cashiers
check. It is not necessary to know the amount "to the penny".
Attorneys may accept personal checks up to $5,000.00.
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WHAT IF I HAVE QUESTIONS?
Before or after closing, that is what your real estate professionals
are for. Real estate agents, Loan Officers and the attorney will be
happy to answer any questions you might have, even if you don’t
think of them until after closing. At the closing, if a questions
arises, feel free to ask! The attorney is to handle the legal part
of the transaction, but also is to explain what is happening and be
sure you understand what is happening. Attorneys expect questions,
so feel free to ask.
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