Who Pays for What at Closing?

The Seller can normally be expected to pay for the following:

 Real Estate Commission.

  • Owner’s title-insurance premiums.
  • Half of the escrow fee (except for VA loans, where the seller pays 100%).
  • Payoff of all loans in seller’s name.
  • Fees, re-conveyance fees, and prepayment penalties.
  • Home warranty according to the contract, if any.
  • Any judgements, tax liens, etc., against the seller.
  • Recording fees to clear all documents of record against the seller.
  • Tax pro-ration. This is for any unpaid taxes at the time of transfer of title.
  • Any unpaid homeowner-association dues.
  • Any assessments according to the contract.
  • Any and all delinquent taxes per the contract.
  • Appraisal.
  • State real estate tax fee.
  • Sales tax.
  • New approval of well, septic, and as-built survey (if required).
  • Re-inspection fee with appraiser or home inspector (as negotiated in contract).
  • Half of the document-preparation fee (unless VA or FHA loan; then the seller pays 100%).
The buyer can normally be expected to pay for the following:
  • Lender’s title-policy premium–American Land Title Association (ALTA).
  • Half of escrow fee (unless you are a verteran and getting a VA loan; then the seller pays 100%).
  • Recording charges for all documents in buyers names.
  • All new loan charges (except those required of the seller by the lender).
  • Interest on a new loan from date of funding to 30 days prior to first payment date.
  • Assumption/change-of-records fees for takeover of existing loan.
  • Home warranty according to contract.
  • Fire-insurance premium for the first year.
  • Home inspection.
  • Reserve account for taxes and insurance.
  • Flood-certification fee.
There are some mandatory costs:
  • Both FHA and VA require that the seller must pay for document preparation, tax service, warehousing, and loan-review fee (if any).
  • VA: 100% of escrow closing fee.

Understanding You Options for Taking Title!

Carefully consider how you intend to take title of your property. This will determine your legal status, rights, and obligations to the property. You may want to discuss your options with an attorney to determine which is best for you. Most of the possible ways to take title to your property are listed here.

Community Property

In a community-property state, there is a statutory presumption that all property acquired by a husband and wife is community property. Some states do not presume community property status unless you acquire title as such. Community property is a co-ownership method for married persons only. Upon the death of a spouse, the deceased spouse’s interest in the property will pass by either a will or interstate succession.

Community Property With Right of Survivorship

This is a method of co-ownership that allows a married couple to hold title as husband and wife while providing for succession outside of probate upon the death of  either spouse to convey or encumber. Both halves of the community property are entitled to a “stepped up” tax basis as of the date of death.


Title may be taken in the name of a corporation provided that the corporation is duly formed and in good standing in the state of its incorporation.

General Partnership

Title may be taken in the name of a general partnership provided that the general partnership was duly formed according to the laws of the state. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.

Limited Partnership

Title may be taken in the name of a limited partnership provided that there are one or more general partners and one or more limited partners. A certificate of limited partnership must be filed in the office of the Secretary of State, a certified copy of which must be recorded.

Joint Tenancy With Right of Survivorship

Joint tenancy is a method of co-ownership that gives title to the real property to the last survivor. Title to real property can be acquired by two or more individuals. If a married couple acquires title as joint tenants with the right of survivorship, they must specifically accept the joint tenancy to avoid the presumption of community property. 

Sole and Separate

Title to real property owned by a spouse before marriage or any acquired after marriage by gift, descent, or specific intent may be taken as sole and separate. If a married person acquired title as sole-and-separate property, his/her spouse must execute a disclaimer deed if the state is a community-property state.

Tenancy in Common

Tenancy in common is a method of co-ownership in which parties do not have survivorship rights and each owns a specific undivided interest in the entire title.

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Understanding Title Insurance!

What is Title Insurance?

A Title Insurance Policy is a quarantee by a title company that a thorough investigation of the title to the property has been conducted and that you have been notified of any outstanding claims to the property. The title insurance company reports any defects in the title in the form of a Title Commitment so that these matters can be corrected. It is important that you know of all claims on the property and have them resolved and declared removed prior to you taking title to the property.

The Title Commitment will carefully detail what items of encumbrance are not covered by the policy. You can either get these items resolved or bow out of the transaction. Title insurance covers matters that occurred before the policy’s effective date but were discovered later. Your policy will detail what is covered, what is not covered, and the effective date.

Title insurance is issued by the title company when they are certain the property is free from all liens, encumbrances, interests, etc., and the insurance guarantees such. This is so the title can be legally transferred to the buyer to be used as security for the lender’s funds. This is why title insurance is required by the lender. Your lender has an interest in knowing that you and the lender are the only parties with claims to the property.

The title insurance company thoroughly searches the public records to uncover any unpaid taxes, mortgages, judgments against previous owners, easements, and other court actions or recorded documents that can affect title to the real estate. The insurance also provides protection against any defect in the public record such as forgery, similar names, error in the records, etc., and protest against any undiscovered or unrecorded claims that may arise in the future.

When title insurance is issued, the title insurance company accepts the responsibility for any and all claims on the property prior to your purchase if they do not find the claim or call it to your attention prior to your purchase of the property. That responsibility includes defending your title in order to perfect your title and keep you in possession of your property.

Unlike other forms of insurance, the original premium is your only cost as long as you or your heirs own the property. There are no annual payments required to keep your Owner’s Title Policy in force.

Title insurance protects you twice–it notifies you of claims against the property and insures you against any future claims on hidden items.

Important Decisions in Buying – Cain and Company Buyer’s Book


For more information on what Title Insurance is and what is does for you check out www.title.com !

“Need some DON’T buy that house if it has….”advice?



You don’t have to be a “do-it-yourselfer” to spot some obvious “warning signs” when looking at houses. Here are some simple tips and things to look for when house hunting! Remember that having a certified inspector take a look at the home you choose to put an offer on is vital to saving money down the road. With these tips you can rule out homes that look “nice”, but have costly issues, before you get to that point.

From the curb.

Before you enter the house, take a walk around the outside. Look at the foundation. Is the landscaping angled away from the home to control water run-off? If water is pooling near the foundation this can cause deterioration of the foundation and be a sign of leaking in the basement if the house has one. Also, notice if there are any cracks in the foundation. Large cracks and walls that appear uneven can be a warning sign of bigger problems. Take a step back to the curb and look at the roof. If there is obvious bowing or shingles appear to be coming up, the roof might need to be replaced. Also, large old trees can be nice to look at, but if they are too close to the house there is danger of roots growing into the foundation. They can also be a hazard in bad weather if they are leaning towards the house.

Once inside the house, start on the lowest floor and work your way up.

If the home has a basement or crawl space, take a look. Pooling water or mold on walls is an obvious hazard and sign of leaking. Look for cracks in foundation walls and signs of walls that are leaning. If everything appears to be solid take a look around for the electrical box and furnace. Both of these need to be in good working order and up to standards for the state you live in.  According to the FHA guidelines, electrical should be at least 60-watts, if it appears to be running the appliances that are present sufficiently. For homes with all electric, heating and appliances, 200 watt amperage is recommended. Take a look around the furnace for pipes that are broken or disconnected.

Main living area, kitchen and bathrooms.

While you’re looking around to see if you like the layout of the house, take a look at the walls and ceilings. Are there cracks that appear deeper than just the paint? Do the walls appear even and free of holes or areas that “look” repaired? In kitchen and bathrooms, check under the sinks for leakage and mold.  Look around walls near bathtub and sinks for signs of water damage and mold. Mold can be dangerous as well as pricey to get rid of. Check the pressure of the water if possible and notice if water appears to drain easily. Check for discoloration and mold around window sills and doors. Windows and doors a can both be pricey to replace.

There are a million and one things to consider and worry about when purchasing a “new” home, but with a little sleuthing and a basic idea of the most important and most expensive items to replace/repair, you can save yourself a lot of time and money! Happy hunting!

Finding obvious signs of deterioration might not be as hard as you thought!

For more information on homes click here: www.kevinduffy.com

FHA Loan- Parent Co-Signer

Under the FHA rules, a parent can co-sign a loan for their child.  The property is owned in the child’s name, not co-owned with the parent.  FHA puts all of the income and debt into one calculation, so it is possible to have a child who does not earn any income purchase a property using FHA financing with a parent co-signer.

Regarding the number of properties that can be purchased, it appears that we’re in a grey area.  An FHA buyer cannot buy another property using FHA unless the previous home has been sold.  That specific rule doesn’t apply to a non-occupant co-borrower, so a parent who has an FHA loan can co-sign for an FHA loan for their child.

The discussion of multiple properties financed this way is addressed, the specific comments are:

“Transactions in which parents help their children buy their first home are permitted as long as the non-occupant co-borrower is not developing a portfolio of rental properties”


“The amount of the financial contribution by the non-occupant co-borrower and the number of other properties similarly owned must be looked at closely.”

So, if you’re co-signing parent has a bunch of other properties, then we may be in trouble.  If the kids involved are close to qualifying in their own, especially if they all live in different areas, then we should be ok.  Obviously, if the kids all buy houses right next to each other, then we’re in serious trouble.

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What Buyers and Sellers want!

Realtor magazine did a end of the year survey with buyers and sellers to find out what they want and expect. The top answer to each question is as follows:

1. What is the primary reason buyers give for purchasing home?

Answer: Desire to own a home

2. What do home buyers cite most commonly as a benefit that real estate agents offer them during the purchase of a home?

Answer: Helped understand the process

3.What do buyers look for the most in finding the right neighborhood?

Answer: Quaility of the neighborhood

4. What age range represents the largest segment of home buyers?

Answer: 25-34

5. What’s the first step that buyersmost often take in the home buying process?

Answer: Searching for properties online

6. What do buyers most value when visting a real estate web site?

Answer: Photos

7. What was the primary reason given for selling a previous home?

Answer: Job relocation

Why do I need a home inspection?

Considering that buying a home might be the biggest investments you’ll ever make, wouldn’t you like to be assured that this home is THE RIGHT ONE! Having a home inspection can set your mind at ease by knowing the “ins and outs” of a house, construction methods, operation and maintenance with longevity in mind. There are many home inspectors to chose from.

During a home inspection it is important to let the inspector do their job. While it sounds important and cool to follow the inspector around asking questions and learning, it can be better to save that until the end. You can request for additional time at the end of the inspection for questions/explanations if you would like to have more thorough information. The inspection will begin with the exterior and continue to the inside. The crawl space or basement will be towards the end. An inspector will check electrical, structural, insulation levels, plumbing, mechanics (furnace, a/c, hot water heater, etc), and many more items. They will give you a complete report which will show the age and condition of everything checked. The end of the report will show the minor repairs which normally consist of smaller items that are more informational to watch or fix if you desire. The major repairs are in need of a closer look as these could be expensive to repair. You will need to negotiate with the seller to either repair or give a concession to repair after closing. It is advisable to request that a licensed contractor repair the major items.

While purchasing a home can be over-whelming, finding a trustworthy inspector is one step to take that lessens the stress of this important event! Let us help you out!

Why Buy?

9 Reasons to Buy Versus Rent your Home!

1. Pride in Owning: Most people buy homes to have control over where they live. Although investment features are important, the psychological reasons for buying–the satisfaction of owning and freedom from paying rent–are at least as important.

In a survey done by the National Association of Realtors of 6,000 homeowners and 2,000 renters–perhaps the largest survey ever of attitudes toward home ownership–it was shown that 76% of owners and 66% of renters considered pride of ownership an important reason for buying.

2. Dislike paying Rent: Close to 7 in 10 of almost equal portions of owners and renters expressed a dislike of paying rent as an important reason to buy. Renting offers a lifestyle that’s nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, no tax benefit, and no protection against regular rent increases. Writing a rent check is just like watching your hard-earned money sail away!

3. Settling Down: More than 6 in 10 renters said “settling down” was an important reason to by.

4. Good Investment: 76% of owners and 69% of renters said that the investment aspect of ownership was important.

5. Tax Advantage: Property taxes and qualified home interests are deductible on Schedule A, for itemized deductions.

6.Long-Term Appreciation: People consider homeownership a good investment because they view it as a long-term venture. Historically, home prices have risen at relatively steady rates. Existing home prices rose an average of 4% per year between 1980 and 1992.

7. Leverage Investments: People borrow a great deal to buy homes, yet they receive the full benifits of price appreciation. In the long run, investments in homes far out pace inflation rates.

8. Source of Savings: Homeownership always has been and continues to comprise the singel largest source of savings for American households. Howeowners build equity and can borrow against it.

9. Sacrifices Are Worth It: Almost 7 in 10 renters in the National Association of Realtors homeownership survey said that they planned to buy a home in the future. More than three-quarters of these people said they were willing to sacrifice to do that.

The Fire Drill—And Other Tips For Showing Your Home Successfully!

So, you might be a bit overwhelmed by the plethora of information available out there about selling a house; tips, tricks, and every piece of advice under the sun. To make it simpler, here is a list of “Seller Reminder Points” that are extremely simple, to the point, and helpful. They aren’t intended to be every bit of information you’ll need during the selling process, rather, they are meant to be an aid in the “showing” process.

Seller Reminder Points

1. Don’t “sell” your home. Let the agent do his/her job. The agent will show the benefits based on the Buyer’s needs, wants and perceptions.

2. “Fire Drill” time is: Opening blinds, turning on lights, turning the television off, put soft music on.

3. Agent drive bys/drop ins. Say “I’ll be happy to allow you to show the home. Can you give me 3 minutes?” Then it’s Fire Drill time!

4. Greet your Buyer and agents at the door (if you are at home) and direct them to listing information book about your home. Then please leave the home to allow the buyers to look in leisure.

5. Say “If you have any questions, I’ll be in the back/front yard” and leave the house at this time.

6. Keep track of how long the buyers are in the house. If any buyers are in the home more than 25 minutes, they may be very interested.

7. If asked an uncomfortable question, i.e. lower price, modifications the buyers may want, types of people that live in the neighborhood, etc., simply say “I think it is something my agent would be happy to talk with you about.”

8. Remember “real” buyers want to touch, smell and explore. Have your kitchen drawers, closets and garage organized.

9. Never apologize for the present condition of the home. If it is unclean, or toys are out, don’t mention why.

10. Most agents may not arrive on time when showing property. Many will be ahead of or behind schedule, or may not even show up at all.

“The Fire Drill”, along with these other reminders, is a great plan to have in place in order to be ready to open your door to prospective buyers with only a few minute’s notice and still Wow them from their first step inside!

Getting Pre-Approved!

It is extremely important that you connect with a qualified lender. We can recommend lenders who have earned our trust and with whom we’ve had good experiences in the past. The lender will review your financial position to determine the price most suited to your ability to pay and your comfort level.

The Pre-Approval Process will help you in the following ways:

>You will know in advance what your payments will be.

>You won’t waste time considering homes you cannot afford.

>You can select the best loan package without being under pressure. There are many options and programs to choose from in today’s market. Your lender will explain the alternatives to help you select the one best suited to you.

>Sellers will find your offer to purchase more favorable if they know in advance of your ability to secure financing. This will make your offer more competitive if you are in competition with other offers. Nowadays, most listing agents require a pre-approval letter to accompany all purchase agreements.

>You’ll have an estimate of your closing costs and we will explain them to you in detail.

>You’ll have peace of mind.

Best piece of advice!

Take the pre-qualification one step further and get a full loan approval. This is the best approach!