7 Common Real Estate Document Problems By Karen Winrich @ Financial Literacy (financial-literacy.info)
Buying a home might seem like a test of your patience — if you’re tired of touring multiple homes, talking to your agent, and juggling the influx of paperwork, you’re not alone. Buying a home is a challenge. The latter of these elements — paperwork — can be particularly difficult to deal with when you’re trying to read, sign, and organize dozens of documents. Avoid these seven mistakes to simplify home ownership document management.
1. Incorrect Signatures
It’s unfortunately common for documents to cause delays due to an incorrect signature. If you’re rushing through paperwork and overlooking instructions, you may initial where a signature is required or vice versa. Take your time to avoid this mistake and ensure that you’ve signed every document in the homeownership process properly.
2. Wrong Mortgage Terms
Although it’s less common, it’s also possible to discover errors in the terms of your mortgage contract. If you received a specific guaranteed rate, for example — but your documents indicate a different rate — you need to contact your lender before signing. You should also research mortgage options before you sign any contracts. This will help you understand your budget and ensure that your credit score, employment, and income meet a lender’s requirements.
3. Ineffective Organization
Organizing your real estate documents effectively is yet another important part of the home purchase process. If your files are in a state of disarray, you won’t be able to find important information when you need it. Create a system to categorize and organize all of the files you’ve received and submitted.
4. Damage From Physical Storage
Even if you organize and store documents effectively, you shouldn’t dismiss the possibility of damage. Fires, floods, and break-ins are just a few of the potential threats. When you digitize your documents and store them online, however, you can minimize these risks. Use a PDF editor to combine multiple files, move pages, and order documents correctly, as well as quick and easy to delete certain PDF pages.
5. Lacking Legal Description
Sometimes, there are legal errors within documents that can cause a problem. If you’re reading your real estate contract and notice that it lacks a thorough legal description of the property, for example, you need to request a revision to remedy this issue. A legal description should include the physical address of a home as well as a description of its characteristics.
6. Unclear Contingencies
According to experts, some of the most common realty contract contingencies include conditions for financing, home inspections, and insurance. These contingencies outline the conditions which must be met in order for the transaction to close. If the contingency clauses in a document are unclear, though, you may find yourself dealing with delays.
7. Misspelled Names
Finally, misspelled names are a common cause of conflict in the real estate transaction process. Every party involved in a home purchase should thoroughly review its documents to make sure that their names are spelled correctly. Once a home deed is issued, if the name is incorrect, it can be difficult to change it.
Minimize Document-Related Stress by Avoiding Mistakes
If home ownership has you feeling like you’re swimming in an ocean of paperwork, you can take steps to get your files organized. Digitize your documents to organize them more efficiently, and research mortgages before you sign a contract with a lender.