Well-written contract starts smooth finish A BUYER'S GUIDE

March 19, 1995

Settlement is the absolute end of an often arduous process -- it's time to sit down, sign a lot of papers, hand over the check, and get the keys.

But not so fast. Although settlement can run without a hitch, buyers should work to make sure it does. Delays at this point -- just as you're set to make that home yours -- can be disheartening.

Some problems can't be avoided, settlement officers say, especially as home buying has become more complicated. State and federal laws call for ever more paperwork, out-of-town investors often add another layer of scrutiny and lenders can be overloaded with work, especially with refinance loans.

But buyers and sellers can prevent some of the more common headaches, experts say. The key, they say, is preparation and communication between buyer and seller and real estate agents.

That preparation starts with the sales contract. Properly written, it can pave the way for a smooth closing. But some contracts lack key items -- seller disclosure information, how the purchase will be financed, when the home inspection will take place. Title people suggest working with a real estate agent or attorneys to avoid that.

When choosing a lender, buyers should look beyond the lowest possible interest rate and consider how well-equipped the lender might be to process the loan. That can vary, says Michael Bell, owner of Columbia Town Center Title Co.

In one of every 10 cases, lenders fail to send the package of loan documents to the title office in time for settlement, he says.

Because mortgage and title companies tend to be busier with settlements at the end of the month -- when buyers are trying to save on prepaid interest costs -- mistakes are likelier. Buyers might want to avoid that time.

Consumers are urged to choose a title company well in advance of settlement and base the choice on a good recommendation.

Experts also suggest buyers not wait for settlement day to take their final walk-through.

Buyers should arrive at settlement with essential documents, such as their new homeowners insurance policy and the termite inspection report.

Most title companies require either a cashier's check or certified check for the down payment. The title company should have closing costs computed a day or two before settlement.

K? The exact amount you owe may change slightly at settlement.

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