I Am Asked This All the Time

Question: “I’m about to close on my house and I’ve paid insurance and taxes into escrow for the coming year. Do I get that money back at closing?”

Answer: You do not receive the money at closing, but you will receive the money once the closing agent sends your loan payoff to the lender. The amount could include the taxes and insurance you paid monthly with your PITI (Principal Interest Taxes & Insurance) payment. It’s always a good idea to notify your insurance agent that you no longer own the home.

Question: “Should I have my home and carpets professionally cleaned when I move out?

Answer: In Jacksonville, our “purchase and sale agreement” states that the “seller shall sweep the property clean and remove all personal property not included in the sale.” However, I’ve moved twice in the last 15 years and once my furniture was moved out of the house, I felt the carpeting needed to be cleaned to make the home look move-in ready. I believe it is the kind thing to do and what we would want when we buy a new home.

Question: “What is a contingency?”

Answer: In Jacksonville, there are several built-in contingencies in our “purchase and sale agreement”: Loan Approval, Inspections, and Appraisal. This means that there is a set time for something to be done and until that contingency is removed or satisfied, the process cannot move forward towards closing. Additional contingencies may be added by the buyer or seller.

* Loan Approval: This is satisfied when the buyer “furnishes any and all credit, employment, financial and other information required by lender sufficient to generate a loan estimate, pay all fees required by buyer’s lender, and make a continuing and diligent effort to obtain loan approval.

* Inspections: In Jacksonville, our “purchase and sale agreement” allows 10 days from the date of a fully executed purchase and sale agreement to inspect, “all major appliances, heating, cooling, mechanical, electrical and plumbing systems, well and septic and drain field systems, salt water and fresh water, ground permeation, and intrusion, the roof, pool and pool equipment, defective drywall, defective flooring, mold, asbestos, lead-based paint, drainage, radon gas and environmental and sinkhole conditions. It also includes inspecting for active infestation and /or damage from termites and other wood destroying organisms. And finally, the buyer has the opportunity to verify the cost and availability of insurance that condominiums/home owner’s insurance, is satisfactory to buyer’s lender, verifying square footage measurements, rules and other governing documents affecting the property.” During the inspection process, the buyer can also have an energy-efficiency inspection, which can include multiple additional inspections.

* Appraisal: The appraisal contingency allows enough time for the buyer’s lender, after the appraisal is paid for, to walk through the home, take photos, and use comparable sales in the neighborhood (usually within the last 6 months) to determine the fair market value of the home.

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