/(*$/ 127(6
BY
Lucien C. Gwin III
To Buy or Not to Buy: Buying a Home
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ne of the most daunting decisions LQ \RXU OLIH DV DQ DGXOW LQGLYLGXDO RU DV SDUW RI D FRXSOH LV EX\LQJ WKDW ÀUVW VHFRQG RU WKLUG KRPH 7RGD\ LI \RX DUH ÀQDQFLQJ WKH KRPH WKURXJK D lending institution, i.e., a bank or lending FRPSDQ\ EX\LQJ D KRPH KDV EHFRPH PRUH complicated due to new federal regulaWLRQV ,I \RX KDYH HQRXJK PRQH\ WR SD\ FDVK IRU D KRPH WKHQ \RX DUH LQ D PXFK more comfortable and less complicated poVLWLRQ /HW·V FRYHU WKH VWHSV WKDW \RX ZLOO JR WKURXJK ZKHQ EX\LQJ D KRPH ZLWK FDVK YHUVXV ÀQDQFLQJ \RXU SXUFKDVH RI D KRPH 7KH ÀUVW VWHS RI FRXUVH LV WKDW \RX KDYH WR ÀQG D KRPH WKDW \RX NQRZ LV IRU VDOH ,I D KRPH LV QRW OLVWHG ZLWK D UHDOWRU·V RIÀFH \RX KDYH WKH DELOLW\ WR GHDO GLUHFWO\ with the home owner. On the other hand, if the home is listHG ZLWK D UHDOWRU \RX ZLOO VHH WKDW UHDOWRU·V VLJQ LQ IURQW RI WKH KRPH <RX KDYH WZR FKRLFHV <RX FDQ FDOO WKDW UHDOWRU GLUHFWO\ DQG KDYH KLP RU KHU UHSUHVHQW \RX DQG WKH VHOOHU RU \RX FDQ FDOO \RXU RZQ realtor and have him or her contact the reDOWRU ZKRVH VLJQ \RX VDZ ,Q P\ RSLQLRQ
PRVW UHDOWRUV GR D JRRG MRE RI H[plaining the nuances of a home sale and are a good guide and source of LQIRUPDWLRQ WKDW \RX ZLOO QHHG LQ the purchasing process. 2QFH \RX KDYH GHFLGHG RQ D KRPH and realtor and have negotiated D SXUFKDVH SULFH HLWKHU GLUHFWO\ with the home owner or through D UHDOWRU \RX ZLOO VLJQ D &RQWUDFW IRU 3XUFKDVH DQG 6DOH ,I \RX GR QRW ZRUN ZLWK D UHDOWRU , VWURQJO\ XUJH \RX WR FRQWDFW DQ DWWRUQH\ WR prepare a contract. A realtor, of course, will have a Contract for Purchase and Sale, a form approved E\ D VWDWH·V $VVRFLDWLRQ RI 5HDOWRUV , KDYH SHUVRQDOO\ UHYLHZHG PDQ\ RI these real estate contracts provided E\ UHDOWRUV DQG , WKLQN WKH\ GR D JRRG MRE RI ELQGLQJ WKH SDUWLHV WR the purchase and sale. 1H[W LQ WKH HYHQW \RX DUH ÀQDQFLQJ WKLV SXUFKDVH \RX PXVW GHFLGH RQ D OHQGHU $OO , FDQ VD\ LV to check the rates for conventional ORDQV ,I \RXU FUHGLW VFRUH LV OHVV WKDQ \RX PD\ KDYH D KDUG WLPH VHFXULQJ FRQYHQWLRQDO ÀQDQFLQJ ,I \RX DUH D YHWHUDQ \RX PD\ TXDOLI\ IRU VSHFLÀF YHWHUDQV· ORDQV DV ZHOO DV )+$ ORDQV ZKLFK UHTXLUH D ORZHU GRZQ SD\PHQW WRZDUG WKH SXUFKDVH SULFH EXW UHTXLUH \RX WR SXUFKDVH mortgage insurance. The loan process, no matter which OHQGHU \RX FKRRVH FDQ WDNH VL[ WR WZHOYH weeks from loan application to closing. The loan application process involves SURYLGLQJ ÀQDQFLDO LQIRUPDWLRQ WR HQVXUH WKDW \RX FDQ DIIRUG WR SD\ WKH ORDQ DQG requires an appraisal of the home, an DSSUDLVDO SDLG E\ \RX ZLWK WKH OHQGHU VHOHFWLQJ WKH DSSUDLVDO FRPSDQ\ $V D rule for the loan to be approved, the home must have an appraisal value of at least the DPRXQW RI \RXU ORDQ 1H[W WKH OHQGHU DOORZV \RX WR FKRRVH DQ DWWRUQH\ WR UHVHDUFK WKH WLWOH WR WKH SURSHUW\ 7KLV SURFHVV HQWDLOV WKH DWWRUQH\·V JRLQJ WR WKH FRXUWKRXVH RI WKH FRXQW\ in which the home is located to review all land and mortgage records to see if the current owner has a current deed of WUXVW PRUWJDJH VHFXULQJ WKH SURSHUW\ ,Q
DGGLWLRQ WKH DWWRUQH\ DOVR FKHFNV IRU DQ\ WD[ RU RWKHU OLHQV RQ WKH SURSHUW\ 2IWHQ SURSHUW\ KDV OLHQV WKDW PXVW EH SDLG RII E\ the seller at closing. 2QFH \RX KDYH VHOHFWHG WKH KRPH KDYH agreed on a purchase price, submitted the loan application, had the appraisal FRPSOHWHG KDG \RXU DWWRUQH\ FRPSOHWH WKH WLWOH ZRUN DQG KDG \RXU FUHGLW DQG GHEW ORDG DSSURYHG E\ WKH OHQGHU \RX DUH UHDG\ WR FORVH DND EX\ WKH KRXVH ,I \RX DUH SD\LQJ FDVK WKH EX\LQJ SURFHVV LV PXFK IDVWHU $V WKH EX\HU \RX QRUPDOO\ EULQJ WR WKH FORVLQJ D FHUWLÀHG FKHFN IRU WKH SXUFKDVH SULFH SOXV DQ\ IHHV DQG FRVWV WR FORVH <RXU DWWRUQH\ ZLOO DFW DV WKH FORVLQJ DWWRUQH\ )RU D FDVK VDOH WKH GRFXPHQW ORDG XVXDOO\ FRQVLVWV RI D :DUUDQW\ 'HHG D FDQFHOODWLRQ UHOHDVH RI WKH VHOOHU·V 'HHG RI 7UXVW DQG D FORVLQJ statement that outlines all fees and costs RI WKH VHOOHU DQG EX\HU For a cash sale, the process takes DSSUR[LPDWHO\ WHQ WR ÀIWHHQ PLQXWHV $W FORVLQJ WKH VHOOHU SD\V WKH UHDOWRU QRUPDOO\ VL[ SHUFHQW WKH VHOOHU·V GHHG of trust is paid out of the sale proceeds; DQG WKH SURSHUW\ WD[HV DUH SUR UDWHG 7KH DWWRUQH\ IHHV DUH H[WUD IRU WKH EX\HU DQG are outlined on the closing statement. ,I \RX DUH ÀQDQFLQJ \RX FDQ H[SHFW WR VLJQ WKLUW\ WR ÀIW\ VHSDUDWH GRFXPHQWV due to federal regulations. You will sign disclosure statements, errors and omission statements, Patriot Act statements, RFFXSDQF\ VWDWHPHQWV D UH DIÀUPDWLRQ RI FUHGLW UHSRUW QDPH DIÀGDYLWV WUXWK in-lending statements, and a deed of trust PRUWJDJH WKDW LV DSSUR[LPDWHO\ WHQ WR WZHQW\ SDJHV³DOO LQ DQWLFLSDWLRQ RI HYHU\ FRQFHLYDEOH WKLQJ WKDW FDQ SRVVLEO\ go wrong with a loan. Closings can be overwhelming and frustrating. MY TAKE 7KH EXUHDXFUDF\ RI ORDQ PDNLQJ LV EH\RQG ULGLFXORXV DQG FRVWV WKH ERUURZHU PXFK ODUJHU VXPV RI PRQH\ WKDQ LW GLG WZHQW\ ÀYH \HDUV DJR :LOO VRPHERG\ SOHDVH À[ RXU JRYHUQPHQW
Lucien C. “Sam” Gwin III was admitted to the Mississippi Bar in 1981 and has been practicing many aspects of the law at the firm of Gwin, Punches & Kelley in Natchez, Mississippi, ever since.
Bluffs & Bayous { March / April 2021 { Page 23
