Posted by dmmcgee on 6/12/04 8:51am
Msg #3006

Purchase Loan

Hello Everyone,
Having never done a purchase loan, what forms can I expect to see and notarize? Does anyone charge extra since it is more paperwork? Thanks in advance for your help.

Donna in PA

Reply by Anonymous on 6/12/04 11:22am
Msg #3007

Better make sure you know what you are doing. Purchases are much more complicated. Money changes hands everything has to be right.

Reply by PAW Notary Services on 6/12/04 3:09pm
Msg #3011

Re: Purchase Loan - Not that complicated

I disagree that purchase or more complicated. They really aren't, just much more intense and nerve-racking. The biggest issue is that often money will be exchanged at the table (wet closing). If it's a dry closing (no money changing hands) and the sellers are expecting a fat check, all heck can break loose.

There is NO RTC so everything has to be perfect at the table.

You cannot alter the HUD. This may be required, and often is, but without the settlement officer, closing agent, or an authorized representative from the title company, things could be hairy as the seller and buyer will be expecting you to make things right.

You may have many other people at the table too. Attorneys, real estate agents, brokers, etc. may all be there. You will be leading the closing, so if you're not a "take charge" person and work well under pressure and in front of scrutinizing eyes, you may want to pass on a purchase (especially of existing property).

However, new home purchases can be a snap. I do lots of these for builders here. Usually, it's just the buyer. They bring me a big fat check as per the HUD which I in turn give to the title company. Also, I am working as a title company agent, which gives me a little more latitude in what I do, but I still can't make any changes to any document, but I can explain where numbers come from, which you normally cannot do as a signing agent. When doing new home closings, I am really acting as the closing agent for the title company.

Now, for the documentation differences. Not too much. Of course, NO RTC. HUD will reflect buyer and seller funds. Buyers and sellers must sign off on the HUD. Sellers documents are few. HUD and a conveyance deed (Warranty Deed for example) to transfer the title from the seller to the buyer. Be sure the buyers names (grantee) matches their ID's so there won't be an ID problem down the road. The grantor is the only one signing the deed, but the title will be listed as specified for the grantee. So if the names as grantee is wrong, a mess develops later when ID's are needed.

Other things you may encounter are things like survey documents, pest inspections, appliance inspections and acceptance, etc. etc. etc. These typically don't require notarization, but make the package a bit bigger.

If you have the opportunity to "witness" a purchase transaction by another agent, then by all means do it. It will make you more comfortable when you're "on your own". Also, many title companies will allow you to watch one of their closers as a training exercise. In return for the experience, offer to close a purchase or two for free. This not only gives you great experience, but you may pick up a new client yourself.

Good luck and happy signing.

Reply by sue/pa on 6/12/04 8:27pm
Msg #3013

I also think they are A LOT more complicated than a refi. They basically are nothing the same. At a purchase, no matter what anyone calls it, you are doing a settlement/closing. You are the person orchestrating the entire event. You are in charge. If you've never done one and don't know what the paperwork is, I'm not sure how you can be in charge. You give the seller's documents to their representative. Of course, if they don't have one you have to take care of them. Naturally, you must know what goes on their pile. You take care of the borrowers docs the same as during a refi. buyers & sellers sign some of the same docs and you need to be sure they get to both sides of the table. You are fielding the comments, questions, but-ins by the real estate agents. They might have some of their own paperwork to be signed and they hop right in with it. You MUST find out before hand if you are disbursing the funds and if not you MUST be sure the title company has made absolutely certain that everyone knows that before you arrive. I'm not one for doing much work ahead of time but in purchases, if you find out you are not disbursing it's best to call the realtor to 'touch base' but to really be certain they know you won't have the checks. You fax paperwork to the lender and then wait for a funding number. If you don't know your docs and miss something, you're not getting the funding number and perhaps the lender will or won't call you to let you know or perhaps they'll call the title company who will or won't let you know you missed something. Perhaps the lender is busy and hasn't gotten to your stuff yet so you sit, twiddle your thumbs and wait because no one has told you that you can call the lender yourself and ask that they review your paperwork while you hold and give you your number. If you have disbursement checks but the HUD has changed (while you sit waiting for the changes that you have called the title company with), then you must deal with people wanting to know why you don't have blank checks to redo their checks (as an aside, when you work directly for title companies for a while and they ABSOLUTELY trust you, you will have blank, signed checks in your possession). Of course, those blank, signed checks make the title company nervous so they are on the phone more than the antsiest of signing services - Have you received the package, are the checks in it, make copies of the written checks, void unused checks, fax copies of checks, are you sure you voided unused checks). Throughout all of this, you must keep everyone on track because the borrowers are wanting to know how many times a week the grass must be mowed, do they really need a snow blower, who is your plumber. Sellers are telling that there is extra paint in the garage, storm door sticks w/humidity, be sure to mulch the mums from Great Aunt Sally out back, etc. The sellers are wanting to tell every little miniscule thing they have done to enhance the property, including telling which ceiling fans to have on in concert to make it seem like air conditioning. Oh, I forgot to mention the proverbial 'walk through'. If something isn't right with the property, then they must do an escrow agreement and escrow funds (of course that changes the HUD). And what great fun when the sellers haven't gotten out of hte property and a rent back agreement is hastily drawn up in a room filled with totally stressed out buyers & sellers - or perhaps they're no longer in the same room because one party has had to go to the hallway and the other party remaining in the room with you is sobbing her eyes out while the husband is looking like he's going to deck the first person through the door. Then comes the funds. You've got the mortgage (and lately it seems it's always 2 to avoid the mtg insurance). then you've got the deposit coming back from the realtor (unless they've forgotten it and you've got to wait while they return to their office to get it). you've got funds due from sellers. you add all the numbers and checks up to be sure it's the right amount for this loan to go through.

there is absolutely no room for errors at a purchase. all that said, I make a lot of money lately doing purchases and if you know what you're doing, most of them go smoothly. and, as Paul said, I think new construction is usually very easy - unless it's the one builder that I've got that messes everything up 1/2 the time, down from 3/4 of the time so they are improving.

Reply by Joan-OH on 6/12/04 10:10pm
Msg #3015

Wow Sue.

I'm glad I live in Ohio. I have never been through any of that! I've done about 30 purchases with just the purchasers. Just yesterday, I did the sellers docs, then down the street to do the purchasers docs. The payoffs were not firm, so I only had an estimated HUD. Everything went very smoothly. PA must be much more stringent. You sound like you earn every penny of your fee.

Joan