These dates and deadlines include:
- Loan application and commitment deadlines;
- Appraisal deadlines;
- Title deadlines;
- Survey deadlines;
- Seller's property disclosure deadlines;
- Inspection deadlines; and
- Closing date and time;
A title company is typically engaged to provide a Title Commitment that will show whether the Seller is the owner of the property and also what encumbrances or recorded documents, such as liens, deeds, and covenants, affect the property. It is very important to have your Title Commitment and any documents that are listed in the Schedule B-2 Exceptions reviewed by your attorney within the title deadline to make sure you are receiving merchantable title. Your attorney can advise you regarding any legal issues or problems as a result of the Title Commitment or the recorded documents that affect the property you are purchasing.
It is also often recommended to have an independent inspection performed by a qualified home inspector. Your attorney can assist you in retaining a home inspector for this purpose. If there are any concerns raised in the inspection report, you can request that the Seller fix or address any of these concerns or you can decide if you do not want to purchase the property due to these concerns. This must occur prior to the inspection deadlines.
You may also decide to have an appraisal done upon the property to make sure the appraised value is equal to or greater than the purchase price. Your lender may require an appraisal. You may also want to have a survey performed or an improvement Location Certificate. Most lenders will require a survey or ILC but you may want to consider one even if not required by the lender. You can ask the seller if they have a current ILC but make sure it is up to date. A survey or ILC will show you if there are any encroachments or easements that affect the property. It is also worth requesting in your contract that all of the "standard exceptions" be deleted in the Title Commitment. If the standard exceptions are deleted, your title insurance will cover any problems that a survey or ILC would show. The title company will typically require an ILC in order to delete the standard exceptions unless you are purchasing a condominium unit.
Your attorney will also discuss with you how title will be held for the property such as in joint tenancy such that on the death of one owner the property passes to the survivor, or as tenants in common - where one owner dies and that owner's interest in the property passes to their estate.
Your attorney will also review your closing documents, including your loan documents, to confirm that the closing documents meet the contract requirements, that the Deed passing title is correct and that the loan documents accurately reflect the loan terms you agreed to.
Title insurance is used widely throughout Colorado. The title policy will protect the mortgages against certain risks for the life of the mortgage. For an additional premium, an owner may be insured for the period of ownership. With the up-to-date survey, and your lawyer's opinion, you will know exactly what you are buying and the survey will be useful during your time of ownership.
At the title company's office, you will sign documents and will be advised of the amount required to complete the purchase.
In addition to the balance of the purchase price, you will need the following amounts at closing:
- Property Tax Adjustment
Calculated on a calendar year and paid annually or in installments. You will receive a credit if you close before the taxes are paid.
- Utility and HOA Adjustments
Water and other utilities, and homeowner's assessments in some cases;
- Legal Fees, Closing Costs and Disbursements
- Some Transfer Fees and Taxes May Also Apply
Check with your lender to see whether there are tax, insurance, and mortgage escrows, and processing and appraisal fees, which will reduce the amount, actually received from the lender.
The balance of cash to complete the transaction must be delivered by cashier's check (or otherwise as set forth in your real estate contract) to the title company at closing.
CLOSING:
Upon closing, the balance owing to the seller will be paid to the title company on its undertaking to clear existing mortgages and other charges from title if required by your real estate contract.
You will receive the original Deed from the title company several weeks after closing and will receive your title policy within a couple months of closing.
Possession of your new home is often available immediately following closing. Please check your real estate contract for possession date and time.
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