There is a lot of paperwork involved with a real estate transaction. Here are the main documents you will encounter, what they mean, and why they are important:
- Purchase Agreement
This is the main contract between the buyer and seller. It shows the price, closing date, and contingencies of the sale. If problems come up, like foundation issues, the buyer can back out. You can’t buy or sell the home without this. - Loan Estimate & Closing Disclosure
After applying for a loan, you will receive a Loan Estimate with the initial loan application. It shows the loan amount, interest rate, monthly payments, and estimated closing costs. Prior to the loan closing, you will receive a Closing Disclosure. This helps you identify all of your closing costs associated with the real estate transaction itself. - Final Closing Statement
This document is produced by the escrow officer and is furnished at the end of the closing. It provides a full breakdown of costs, credits, and loan details. It’s important to save this for tax season, since it may be needed when preparing your tax filings (closing costs can be tax-deductible). - Natural Hazard Report (NHD)
This disclosure outlines whether the property being purchased is in a fire zone, earthquake area, or flood zone. It could affect your insurance or safety. - Transfer Disclosure Statement (TDS) & Seller Property Questionnaire (SPQ)
These are provided by the seller to inform the homebuyer about any issues the property may have. Issues can range from property damage to neighborhood concerns. - Agent Visual Inspection (AVID)
The real estate agents tour the property and write down anything they see that might be a problem. This information is passed on to any potential buyer. It’s an extra precaution and does not replace a professional home inspection. - Preliminary Title Report
This shows who legally owns the home and if anyone else has rights to it, like unpaid debts or shared ownership. It helps prevent surprises, like someone else claiming part of your property. This is mandatory for any buyer seeking mortgage financing. - HOA Documents (If applicable)
These explain the guidelines, monthly fees, and whether the HOA is managing the neighborhood well. - Tax Forms—1099
These are provided to the buyer, and they outline all of the interest charges for the mortgage loan (it may be needed for tax preparation).
For more information, call and speak to one of our Mortgage Loan Originators at (760) 930-0569. We are here to talk through your goals and find out which mortgage loan programs could be ideal for your needs.
