Anatomy of a Real Estate Transfer 3 Flashcards
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a. ?
b.
c.
d.
e.
f.
g.
h.
i.
a. Survey review (look for encroachments, set-backs, legal description.)
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b. ?
c.
d.
e.
f.
g.
h.
i.
b. Compare survey legal to (Buyer’s and Seller’s) deed, title work, purchase agreement and mortgage.
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c. ?
d.
e.
f.
g.
h.
i.
c. Environmental review if necessary
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d. ?
e.
f.
g.
h.
i.
d. Do a site visit to determine occupancy.
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d.
e. ?
f.
g.
h.
i.
e. Prepare / review / negotiate all documents required for closing
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d.
e.
f. ?
g.
h.
i.
f. If counsel for borrower, review loan documents, then review with clients, then negotiate with lenders.
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d.
e.
f.
g. ?
h.
i.
g. If more than one lender, clarify 1st and 2nd position and discuss subordination agreement.
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d.
e.
f.
g.
h. ?
i.
h. If duplex do a common wall agreement
Part 5 of The Anatomy of a Real Estate Transfer.
Due Diligence:
a.
b.
c.
d.
e.
f.
g.
h.
i. ?
I. Provide lenders with everything they need to feel comfortable with the transaction if representing buyer.
A _______ _________ _________ should do to show that they are a well-informed buyer. If you are trying to back out of the deal because something is wrong, they will look to see if you did all of the things that a duly diligent purchaser would accomplish prior to closing.
duly diligent purchaser
A ______ __________ __________ doesn’t just order a Certified Boundary Survey they read it. When they read it, they are looking for encroachments- the neighbor might have put up a shed and it might be partially on what is your land. You don’t want to buy land that has somebody else’s stuff on it.
Duly Diligent Purchaser
A duly diligent purchaser doesn’t just order a Certified Boundary Survey they read it. When they read it, they are looking for _________________- the neighbor might have put up a shed and it might be partially on what is your land. You don’t want to buy land that has somebody else’s stuff on it.
encroachments
_______________—- how far the main structure has to be from property lines. Practical standpoint we might think the front yard setback might be from the structure to the road. How far is your house from the house next door – side. Back of the house to the back of the property line and what is in between. – rear yard
set-back
What governs how big the setbacks have to be are typically your municipality or county has decided. The type of law that decides that for you (setbacks) is an ordinance that is called a ________ _____________. Make sure you are not in violation of ________ __________.
Zoning law
Zoning laws.
Legal description will be on survey make sure it matches in all the places it shows up and 5b has them listed.
Compare survey legal to
(___________ and ______________) ________,
__________ __________
______ ____________
_______________
Buyer’s and Seller’s Deed
Title Work
Purchase Agreement
Mortgage
Seller’s ________: If I say Sam, I want to buy your car, I am going to ask for the title that says it is your car. In the realm of real property or land the piece of paper that I want to see to prove that the seller owns the land is the ___________.
deed
deed
You want before you buy a house you want to see the deed that proves that the person selling it to you really owns it and make sure the legal description says that they own as much land as they are trying to sell you. They are trying to sell you 10 acers, but they only own five we have a problem.
What does this refer to?
Seller’s deed.
Before you buy a house, you want to see the __________ that proves that the person selling it to you really owns it and you want to look at that deed to make sure the legal description shows that they own as much land as they’re trying to sell you.
deed
Look at that deed to see if they really own it and compare the _______ ____________ on their deed to make sure that it’s the same legal description of what you are getting because you can’t get more than what they own from the transaction that won’t work.
legal description
Make sure that the deed has been recorded. You do not want a _________ _________.
wild deed
Example: If O conveys to seller and seller never records and seller sells to buyer and buyer records buyer might think that they have done everything right, I recorded. But if somebody goes and searches, they will never find deed to buyer because there is nothing showing deed to buyer because there is a break and it makes it look like O still owns it that gives O the chance to be a jerk. O sells it to multiple people.
What allows O to be a jerk and is used to encourage people to record?
Recording Acts
________ ____________ that says from john to Matthew and that is your deed because it shows that you own it. You can sell it later.
Buyer’s deed
Due Diligence (d): Do a site visit to determine occupancy. This is important because if the property is physically occupied you are ________ ______ _______ __________.
presumed to know that
Important because as we will discover – if the property is physically occupied you are presumed to know that. If you live in Fla. and buy a house in TN, they presume you know. Hire somebody to go check for you. Just like when something is recorded on the public record you are presumed to know. Record notice. Presumed to know everything on the public record and presumed to know that the property is occupied if it is and that could impact your right to own it.
what part of due diligence does this refer to?
Due Diligence (d): Do a site visit to determine occupancy.
If you represent the borrower or the real estate developer your job is to prepare, review and negotiate all the documents needed for the closing.
What part of Due Diligence?
e. Prepare / review / negotiate all documents required for closing.
If you represent the _________ or the ______ ________ ____________ your job is to prepare, review and negotiate all the documents needed for the closing.
borrower
real estate developer
If you represent the borrower or the real estate developer your job is to _________, ____________ and ___________ all of the documents needed for the closing.
prepare
review
negotiate
If you represent the borrower or the real estate developer your job is to prepare, review, and negotiate all of the _________ needed for the _________.
documents
closing
Ex: Closing another deal and the lender has sent me the loan documents and they are an inch thick. The first thing that I should do is _________ __________ _____ _______ ___________.
send them to my client
Ex: Closing another deal and the lender has sent me the loan documents and they are an inch thick. The first thing that I should do is send them to my client and _______ _____ _______ _______ _______ ________.
tell my client to read them
f.If counsel for borrower, review loan documents, then review with clients, then negotiate with lenders.
Ex. Closing another deal and the lender has sent me the loan documents and they are an inch thick. The first thing that I should do is send them to my client and tell my client to read them. They are not going to read them. Handle it knowing that while you told them to read it and they didn’t. How you protect yourself from malpractice. We do 3 things:
1.
2.
3.
- Verify for Accuracy
- list of FYI
- Find Stuff to fight about
you will be amazed how often the borrowers name is wrong on the loan documents, the amount they are borrowing is wrong, the term of the loan is wrong, the interest rate is wrong, and the collateral is wrong those things you have to __________ and check with your ________ to make sure they are right. That part is easy.
verify
check
List of FYI- For your information – knowing your client is not reading anything. The terrible things that could happen if wrong.
If they’re more than ___________ late the amount of the loan might become ______ and __________.
30 days
due
payable
Make a list so that they know short of reading the documents. Make the list and give it in writing and make sure that you have proof. Send email of all ________.
FYI’s
The things you want to negotiate. Your client is thinking about bottom line and a time schedule. If you fight about stuff that is not important and the lender is never going to change. Don’t delay the process because the documents that have to be refreshed will expire and they will have to pay to get the documents done again. They are going to take the 26 things and be like these three let’s fight about those three. The next thing you do after meeting with client is to write a long email to the lender’s counsel and say these are all the things that were typos, and these are the things that we want changed and we are negotiating about.
What does this refer to?
f.If counsel for borrower, review loan documents, then review with clients, then negotiate with lenders.
Find Stuff to Fight About
Due Diligence (f): If counsel for the borrower, review _____ __________, then review with _______, then _________ with _________.
loan documents,
clients
negotiate
lenders
Due Diligence (g): If more than one lender, clarify 1st and 2nd position and discuss ___________ _____________.
Figure out who gets paid back first through a ______________ _______________.
subordination agreement
subordination agreement
Due Diligence (h): If duplex do a ______ _______ agreement.
common wall
If ________ do a common wall agreement. Common Wall they have to agree not to mess it up. Not to light it on fire, not to knock holes in it.
duplex
Due Diligence (i): Provide lenders with everything they need to feel comfortable with the transaction if representing buyer. Closing the _______, distributing the _______.
loan
money
Part 6 of The Anatomy of a Real Estate Transfer.
Closing
* ?
*
*
- Execution and delivery of deed by Seller
Part 6 of The Anatomy of a Real Estate Transfer.
Closing
*
* ?
*
Payment of purchase price (including execution of mortgage/ note. Etc.)
Part 6 of The Anatomy of a Real Estate Transfer.
Closing
*
*
* ?
Settlement of closing costs
The ___________ itself should be pretty easy and pleasant with a lot of signing and shaking of hands.
closing
Pat 7 of The Anatomy of a Real Estate Transfer.
Important from the buyer’s perspective that the deed be recorded post-closing typically a fee is paid to a __________ in addition to the recoding costs and the courier takes it and records it and you get it back and it is really important to the bank and that the mortgage be recoded.
courier
Sometimes you do not secure possession at the closing.
You might get to wait as the buyer to move in _______ ________: the seller has sold but their new house they haven’t closed on yet, so they rent it back from you for a little while longer.
rent back
Our closing happened before their closing on the next house. They needed a month to pack and move out. How much do you think the former seller and the renter should be paying the buyer?
Pay exactly what the per diem is on the mortgage taxes and insurance.
Figure out how much the monthly mortgage payment is with the escrow; you know with the taxes and insurance and then you divide it by the number of days and then it is that much per day.
What does this refer to?
Pay exactly what the per diem is on the mortgage taxes and insurance.
