September 24, 2020 These are the initial tasks once a buyer is in contract, and are most
often done in parallel to Part 2: The mortgage process: A standardized disclosure form called the Maryland Residential Property Disclosure Statement is generally provided by the seller as an addendum to the contract and must be signed by both buyer and seller. Sellers may see making these disclosures as beneficial to
themselves, and believe that buyers will build these pre-disclosed facts into the contract price (and thus sellers may be reluctant to provide any credits for these defects). The
types of inspections vary by property type and situation (and locale), but in Maryland, a home inspector generally inspects the home first, and other inspections and tests can be ordered if revealed to be necessary by the initial inspection. A termite inspection is also often performed in Maryland. For those borrowing to purchase their home, the mortgage process is usually the most stressful and opaque part of the transaction. It’s best to start as early as possible and be ready to produce lots of documentation. The following is the general process in Maryland: The exact amount that triggers this requirement varies by the situation (for instance, a $1,000 cash gift may be material to a single borrower that makes $35,000/yr but may not be material to a borrower that makes $350,000/yr), so it’s good practice to ask your lender if you suspect you might have a material cash gift or large deposit –
so you aren’t surprised by this at the last minute. If the buyer/borrower is unable to get this approval before the expiration of the financing deadline, the both buyer and seller can cancel the contract (though in the buyer’s case, they have to prove they were declined financing through no fault of their own). The seller generally has a set period of time to accept or reject the buyer’s request. If the seller rejects the request, or that time lapses, the buyer can walk away from the
contract without penalty. Tip: As this process can be long, arduous, seemingly arbitrary, and is often critical to your homebuying transaction, try to prepare these documents (or at least figure out how to prepare them) in advance. Also, do not make any changes to your employment or credit until your transaction is complete (not just until you get a loan commitment letter). This means not switching employers even if it results in a higher income, as counterintuitive as that may sound. It also means not leasing or financing a car, opening a new credit card account, or anything else that can affect your credit report. Part 3: The closing (‘settlement’) itselfThe closing, or ‘settlement’ process itself general takes place at one table (either at the office of an attorney or title company), where buyers sign all documents related to their loan and the transaction itself. After all documents are signed and payments exchanged, buyers generally take possession of the keys unless a separate agreement has been reached to allow the seller to stay in the property for a period after closing. The detailed steps that make up closing are:
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