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Buying and selling your home can seem overwhelming when you do not have all the information you may need. There are often many questions regarding the process. We have provided a basic overview of the many facts and procedures involved with your Real Estate transactions. We have also included a few frequently asked questions and have provided the answers for you below. Please contact a Dynasty Real Estate Group associate to review any questions that you may have regarding any or all of these procedures.
ATLANTA REAL ESTATE PROCEDURES
AGENCY DISCLOSURE AND ELECTION
When you purchase a home in the state of Georgia, the relationship between brokers, buyers and sellers must be disclosed to all parties in the real estate transaction. Dynasty Real Estate Group of Keller Williams Realty offers agency relationships to both buyers and sellers and can provide materials to help you decide which agency relationship best meets your needs.
OFFERS TO PURCHASE
The offer to purchase is usually provided by the selling broker. This document should cover all terms of the proposed transaction and must be accompanied by an earnest money check from the purchaser. Once the offer is fully negotiated and signed by all parties to the agreement, it is a legally binding (enforceable) contract. Both purchasers and sellers should make sure they understand all terms and conditions of the offer before signing it and should seek legal counsel if they have doubts or concerns.
EARNEST MONEY
The earnest money deposit made by the purchaser at the time the offer to purchase is written is approximately 5% of the purchase price, but must be an amount acceptable to seller. A personal check is acceptable. If the offer is accepted by the seller, the earnest money is immediately thereafter deposited in the broker's escrow account. It is held there until closing, at which time it is applied toward the purchaser's down payment and/or closing costs. If the offer to purchase is not accepted by the seller, the earnest money check is never deposited and is returned.
FINANCING
Contracts are generally contingent upon the purchaser's ability to secure the financing described in the contract within a specified period of time, and may be rescinded by the purchaser if, after diligent search, the loan described is not available.
LOAN COMMITMENTS
Commitments on conventional mortgage loans are for a set period of time, usually from 30 to 60 days. Commitments for longer periods, such as those required for the purchase of uncompleted new construction, require a non-refundable fee that is applied to closing costs. This fee is usually equal to 1% of the mortgage amount and is paid at the time the mortgage application is approved.
CLOSING DATE
Closing and transfer of title generally take place within 60 days after acceptance of the contract to purchase. There are occasionally unavoidable delays in securing loan approval. You should be aware that even the most diligent agent will have no control over the situation once your loan application has been submitted. Occupancy generally takes place 2 to 3 days after the closing and this period is usually rent free to the seller. A specific date of occupancy is negotiable and is a term of the contract.
CLOSING PRACTICE
Closings generally take place at an attorney's office, with all parties to the transaction being present. The listing and selling agents and/or brokers are also present.
LEGAL COUNSEL
Most closings in this area are handled by the attorney representing the mortgage company, whose fee is paid by the mortgage company and is part of the closing costs. The closing attorney is responsible for the title examination, recording of the documents, etc. Buyers and sellers are encouraged to seek private counsel to resolve any legal questions regarding the transaction or to accompany them to closing. In those instances where no mortgage company is involved, the purchaser may engage, at his expense, any attorney he chooses to handle the transaction.
FUNDS REQUIRED FOR CLOSING
Down payments and closing costs are to be provided in the form of a cashier's/certified check, payable to the purchaser, who will endorse it at closing. An estimate of closing costs may be obtained at the time loan application is made.
TITLE INSURANCE
Mortgagee's title insurance, which protects the lender only, is required by all lending institutions in an amount equal to the amount of the loan. Purchasers are encouraged and advised to obtain owners' title insurance for the full value of the residence, or to discuss this matter with legal counsel.
HAZARD INSURANCE
Purchasers are required to bring a policy for fire and hazard insurance to the closing and, if applicable, a flood insurance policy. The minimum value of this policy should be equivalent to the loan amount. One year's premium must be paid prior to, or at, closing and the policy must contain a loss-payable clause in favor of the lender. Should you pay for the policy before closing, you must furnish the paid receipt at the closing.
HOME INSPECTIONS
Most real estate contracts require the seller to warrant that at time of closing, the property will be in the same condition as it was on the date this agreement was signed by seller, normal wear and tear excepted. It is the purchaser's responsibility to check that all appliances remaining with the premises, and the heating, air conditioning, plumbing (including without limitation, septic tank system or systems, pool and spa) and electrical systems will be in normal operating condition prior to closing, as the seller's responsibility ceases at closing. It is common practice for the Purchase and Sale Agreement to contain a contingency upon the purchaser obtaining a complete inspection of the structural aspects of the premises, as well as the mechanical items. Such inspections can be obtained by employing an inspector of your choice. Costs range from a flat fee of $150.00 to $1.50 per thousand of the sales price. This cost is paid by the purchaser. The correction of any defects determined by the inspection is usually negotiated between purchaser and seller.
WOOD INFESTATION REPORT
It is now common practice for the Purchaser to provide to a wood infestation report at closing, and at Purchaser's expense. A report from a licensed pest control operator on a standard form in accordance with the regulations of the Georgia Structural Pest Control Commission, stating that the main dwelling has been inspected and found to be free from visible evidence of active infestation caused by termite or other wood destroying organisms. If visible evidence of active or previous infestation is indicated, Seller agrees to (a) correct said infestation and structural damages resulting from said infestation and provide documentation evidencing correction of same and/or (b) provide documentation, satisfactory to lender (if applicable), indicating that there is no structural damage resulting from any previous infestation. If any additional inspections and/or reports are requested by Purchaser or Purchaser's Lender, costs, if any, for such inspection(s) and/or report(s) shall be paid by Purchaser.
RADON
Radon tests are available for those purchasers who may have concerns.
FREQUENTLY ASKED QUESTIONS...AND ANSWERS
We have provided a list of frequently asked questions and answers regarding buying and selling Atlanta real estate that will make your buying and selling decision a more informed and pleasant experience.
GENERAL ATLANTA REAL ESTATE QUESTIONS
REAL ESTATE VALUE
Q What factors affect real estate value in the Atlanta luxury real estate market?
A There are several factors that determine the value of Atlanta's luxury real estate. Design, amenities and 'curb appeal' affect value, but a critical factor is the topography of the land. Homes with large backyards that are usable, rather flat and private tend to command the highest prices.
SCHOOLS AND EDUCATION
Q How can schools affect real estate value and where can I find information on schools that my children would be attending?
A The quality of schools and school districts can have a profound impact on the value of the real estate. Properties in better school districts can command higher prices than those in lesser districts. Below are links that can help you determine school ratings and other statistics on Atlanta schools:
AJC Ultimate Atlanta School Guide,
Georgia School Rankings
REAL ESTATE TRANSACTIONS
AGENCY DISCLOSURE AND ELECTION
Q When you purchase real estate in Atlanta, does the relationship need to be disclosed between all the parties involved?
A Yes, when you purchase a home in the state of Georgia, the relationship between brokers, buyers and sellers must be disclosed to all parties in the real estate transaction. Dynasty Real Estate Group of Keller Williams Realty offers agency relationships to both buyers and sellers and can provide materials to help you decide which agency relationship best meets your needs.
OFFERS TO PURCHASE
Q When you have found a property thay you would like to make an offer on, who provides the offer to the seller and what is needed in the offer?
A The offer to purchase is usually provided by the selling broker. This document should cover all terms of the proposed transaction and must be accompanied by an earnest money check from the purchaser. Once the offer is fully negotiated and signed by all parties to the agreement, it is a legally binding (enforceable) contract. Both purchasers and sellers should make sure they understand all terms and conditions of the offer before signing it and should seek legal counsel if they have doubts or concerns.
EARNEST MONEY
Q What is the amount of earnest money required when making an offer on a property and what if the seller does not accept the offer?
A The earnest money deposit made by the purchaser at the time the offer to purchase is written is approximately 5% of the purchase price, but must be an amount acceptable to seller. A personal check is acceptable. If the offer is accepted by the seller, the earnest money is immediately thereafter deposited in the broker's escrow account. It is held there until closing, at which time it is applied toward the purchaser's down payment and/or closing costs. If the offer to purchase is not accepted by the seller, the earnest money check is never deposited and is returned.
FINANCING
Q What happens to a contract if the buyer cannot secure financing after making an offer?
AContracts are generally contingent upon the purchaser's ability to secure the financing described in the contract within a specified period of time, and may be rescinded by the purchaser if, after diligent search, the loan described is not available.
CLOSING DATE
QWhen does the actual closing take place after the seller accepts an offer?
A Closing and transfer of title generally take place within 60 days after acceptance of the contract to purchase. There are occasionally unavoidable delays in securing loan approval. You should be aware that even the most diligent agent will have no control over the situation once your loan application has been submitted. OCCUPANCY Occupancy generally takes place 2 to 3 days after the closing and this period is usually rent free to the seller. A specific date of occupancy is negotiable and is a term of the contract.
CLOSING PRACTICE
Q Where does the actual closing take place and which parties are present at the closing?
A Closings generally take place at an attorney's office, with all parties to the transaction being present. The listing and selling agents and/or brokers are also present.
LEGAL COUNSEL
QDoes an attorney handle a closing in Atlanta and who is responsible for the attoney fees for the closing?
A Most closings in this area are handled by the attorney representing the mortgage company, whose fee is paid by the mortgage company and is part of the closing costs. The closing attorney is responsible for the title examination, recording of the documents, etc. Buyers and sellers are encouraged to seek private counsel to resolve any legal questions regarding the transaction or to accompany them to closing. In those instances where no mortgage company is involved, the purchaser may engage, at his expense, any attorney he chooses to handle the transaction.
FUNDS REQUIRED FOR CLOSING
Q What funds are needed from the purchaser and in what form at the closing?
A Down payments and closing costs are to be provided in the form of a cashier's/certified check, payable to the purchaser, who will endorse it at closing. An estimate of closing costs may be obtained at the time loan application is made.
TITLE INSURANCE
Q What is title insurance and who does it protect?
A Mortgagee's title insurance, which protects the lender only, is required by all lending institutions in an amount equal to the amount of the loan. Purchasers are encouraged and advised to obtain owners' title insurance for the full value of the residence, or to discuss this matter with legal counsel.
HAZARD INSURANCE
Q What is hazard insurance and is it required for purchasers to have at closing?
A Purchasers are required to bring a policy for fire and hazard insurance to the closing and, if applicable, a flood insurance policy. The minimum value of this policy should be equivalent to the loan amount. One year's premium must be paid prior to, or at, closing and the policy must contain a loss-payable clause in favor of the lender. Should you pay for the policy before closing, you must furnish the paid receipt at the closing.
HOME INSPECTIONS
Q What is involved in a home inspection and are there contingencies for structural aspects of the property?
A Most real estate contracts require the seller to warrant that at time of closing, the property will be in the same condition as it was on the date this agreement was signed by seller, normal wear and tear excepted. It is the purchaser's responsibility to check that all appliances remaining with the premises, and the heating, air conditioning, plumbing (including without limitation, septic tank system or systems, pool and spa) and electrical systems will be in normal operating condition prior to closing, as the seller's responsibility ceases at closing. It is common practice for the Purchase and Sale Agreement to contain a contingency upon the purchaser obtaining a complete inspection of the structural aspects of the premises, as well as the mechanical items. Such inspections can be obtained by employing an inspector of your choice. Costs range from a flat fee of $150.00 to $1.50 per thousand of the sales price. This cost is paid by the purchaser. The correction of any defects determined by the inspection is usually negotiated between purchaser and seller.
WOOD INFESTATION REPORT
Q How can a purchaser be protected in knowing that there is no wood infestation problems at the property?
A It is now common practice for the Purchaser to provide to a wood infestation report at closing, and at Purchaser's expense. A report from a licensed pest control operator on a standard form in accordance with the regulations of the Georgia Structural Pest Control Commission, stating that the main dwelling has been inspected and found to be free from visible evidence of active infestation caused by termite or other wood destroying organisms. If visible evidence of active or previous infestation is indicated, Seller agrees to (a) correct said infestation and structural damages resulting from said infestation and provide documentation evidencing correction of same and/or (b) provide documentation, satisfactory to lender (if applicable), indicating that there is no structural damage resulting from any previous infestation. If any additional inspections and/or reports are requested by Purchaser or Purchaser's Lender, costs, if any, for such inspection(s) and/or report(s) shall be paid by Purchaser.
(Source: Beacham & Company, LLC)
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