LESSON 5: CLOSING AND POSSESSION Flashcards
(47 cards)
What is the closing date in the One to Four Family Residential Contract (Paragraph 9A)?
The closing will be on or before a specified date or within 7 days after objections under Paragraph 6D are resolved, whichever is later. If either party fails to close by the Closing Date, the non-defaulting party may exercise remedies in Paragraph 15.
What happens if the closing date needs to be extended?
If the closing date needs to be extended, all parties must sign an Amendment to the Contract.
Who is responsible for curing timely objections from the buyer or third-party lender?
The seller is responsible for curing timely objections within 15 days of receiving them, at no expense to the seller.
What happens if the seller does not cure the objections within the cure period?
If objections are not cured within the cure period, the buyer can terminate the contract or waive the objections within 5 days. If the buyer doesn’t act, the objections are deemed waived.
When must the buyer receive the commitment for title insurance?
The buyer must receive the commitment for title insurance within 20 days of the title company receiving the contract.
What are exclusions in title insurance?
Exclusions include issues related to zoning laws, eminent domain, usury, and matters created, suffered, assumed, or agreed to by the insured claimant. Some exclusions can be covered with an endorsement to the policy.
What are restrictive covenants in real estate?
Restrictive covenants are deed restrictions that govern the use of the property. They are usually set by the original developer and can include requirements on the size, construction type, and number of homes on the property. Buyers should review these carefully before purchasing a property.
What is considered “good funds” for closing?
Good funds for closing include a wire transfer, cashier’s check, or certified check. A wire is directly transferred via the Federal Reserve, and cashier’s checks are immediately available. Certified checks are personal checks guaranteed by the bank.
How can a buyer ensure they have “good funds” for closing?
The buyer should contact their bank early to ask about wire instructions, fees, and lead time for sending funds to the closing.
When does the buyer receive the Closing Disclosure?
The buyer receives the Closing Disclosure 3 days before the closing.
What is required if the closing date needs to be amended?
An Amendment to the Contract must be signed by all parties if the closing date needs to be amended.
When does the buyer take possession of the property?
The buyer takes possession upon closing and funding, unless otherwise agreed in a temporary residential lease or another written agreement.
What is the difference in leases for temporary buyer and seller possession?
In a Buyer’s Temporary Lease, possession is granted before closing, and rent is paid at lease commencement. A Seller’s Temporary Lease allows the seller to remain after closing, typically for no more than 90 days.
What must the seller provide regarding leases on the property?
The seller must provide copies of any leases, including mineral leases, and move-in condition forms within 7 days of the contract’s effective date.
What is the role of Special Provisions in the contract?
Special Provisions are used to add factual statements or business details applicable to the sale, and cannot be used to add new negotiations or items that require a contract addendum or other form from TREC.
What expenses must be paid by the Seller at or prior to closing?
The Seller must pay expenses such as releases of existing liens, prepayment penalties, recording fee release of Seller’s loan liability, tax statements, preparation of deed, one-half of escrow fee, and other expenses specified in the contract.
What expenses must be paid by the Buyer at or prior to closing?
The Buyer must pay appraisal fees, loan application fees, credit reports, loan documents preparation, recording fees, loan title policy, loan-related inspection fees, underwriting fee, and other expenses specified in the contract.
What happens if an expense exceeds the stated amount in the contract?
The party responsible for the expense may terminate the contract unless the other party agrees to pay the excess.
What are Discount points in real estate?
Discount points are pre-paid interest, where one point equals 1% of the loan amount. Borrowers pay points to reduce the interest rate on the loan, thus lowering the monthly payment.
What is a Buy-down in real estate?
A Buy-down is a mortgage subsidy where the seller contributes funds to an escrow account to lower the buyer’s mortgage payments for a period of 1-5 years, making it easier for the buyer to qualify for the loan.
What is a Commitment Fee in real estate?
A Commitment Fee is charged by a lender to compensate for the lender’s commitment to lend, typically associated with unused credit lines or undisbursed loans.
What are the five constitutional rules for property tax in Texas?
- Taxation must be equal and uniform. 2. Property must be taxed on current market value, with exceptions for agricultural land. 3. Property is taxable unless exempt. 4. Property owners must be notified of increases in appraised value. 5. One appraised value for each property.
What are the three main parts of the property tax system in Texas?
- Appraisal District sets property values. 2. Appraisal Review Board resolves disputes over property values. 3. Local taxing units (county, city, school districts) determine tax rates and collections.
