Purchasing a property is an involved acquisition. Due to the amount of money that changes hands, extensive background checks are conducted and a number of documents are required before the deal is finalized. As a buyer, there are steps you can take to make the process as painless as possible, and the first step is to get organized.
If you gather the documents that are going to be requested of you ahead of time, you can save time and avoid unnecessary delays that can cause you to lose your desired property. You are also advised to educate yourself so you are aware of the documents you must receive when the transaction is complete.
Here are three important documents that will be exchanged during a real estate transaction.
Proof of Funds
Whether you have been approved for a mortgage or you will be paying cash for a property, you will be asked to provide proof of funds. Your bank can draw up the necessary document that will provide the proof, but sometimes too much information is disclosed. Bank statements, for example, will show entire balances that can cause the seller, or the seller’s representative, to demand a higher asking price. Therefore, it is a good idea to seek out a proof of funds letter for real estate purchase instead. This service is provided for a nominal fee.
The Deed
When the real estate transaction is complete, you will receive the deed to the property. This is the legal document that transfers the property’s title from the seller to you, the buyer. The document is written and worded in a way that proves you are the new owner of the plot. It is filed with the local courthouse or assessor’s office. It is important that this process is completed since it could delay a future sale if it is not.
The title is also a document that is given to you when the real estate transaction is complete. This document states what percentage of the property you own. An important piece of information because if you intend to make modifications to the parcel or transfer to someone else, the title states the percentage you can legally modify or transfer.
In a real estate transaction, it is important to understand and ensure proper documents are filed and exchanged including proof of funds, deed and title.