Signing a Contract

FAQ

To help you better understand the real estate closing process, we have provided "Need to Know" information and resources below. We recognize that this may not answer all potential questions, so for more information please contact us and let us know how we can help.

 

THE GOOD FUNDS LAW

TRUTH IN LENDING DISCLOSURE

A document required by federal law that discloses the cost of the loan, the annual percentage rate, whether there is a prepayment penalty, and the number and amount of all payments necessary to repay the loan.

POWER OF ATTORNEY

A document that gives another person legal authority to act on your behalf. A Power of Attorney may be general, which gives your attorney-in-fact extensive powers over your affairs, or it may be limited or special, giving your attorney-in-fact permission to handle a specifically defined task.

EARNEST MONEY

A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract (usually applied toward the purchase price.)

IMPOUND/ESCROW FUNDS

A sum of money that the lender requires to be collected at Closing, and monthly thereafter, for payment of taxes and insurance to be disbursed by the lender when bills become due and payable.

PRO RATE

The act of adjusting, dividing or prorating property taxes, interest, insurance premiums, rental income, homeowner’s association dues, etc., between Buyer and Seller proportionately to time of use or the date of Closing.

SUBORDINATION AGREEMENT

An agreement by which one holding an otherwise senior lien or other real estate interest consents to a reduction in priority vis-à-vis another person or entity holding an interest in the same real estate.

WHAT TO EXPECT