If you’ve ever bought a home before, then you know there’s a mountain of paperwork involved. If this is your first time, get ready to deal with all these confusing documents. Not only are there reams of this stuff, but most of it is cast in language that only the experts can understand – inside real estate and financial terms and difficult legal jargon. But you really need to understand what you’re signing when it’s the largest financial transaction of your life. So we offer this brief overview and explanation of real estate paperwork for Denver home buyers.
The Loan Documents
Before you ever get to the actual closing, you’ll have to wade through a forest of loan documents. Exactly which ones depend on the kind of loan, but here are the most common:
- The note shows evidence of your debt to the lender, has a description of loan terms and states the means for the lender to transfer or collect the debt. It also states debt amount, beginning interest rate, conditions of changes in interest rates (if any), and time and place for repayment of what you owe. Because it has value itself, your lender can sell it to another lender.
- The mortgage is your agreement to secure the loan with the property as collateral. Just like the deed, it has to be recorded at the county recorder’s office and so serves as a lien against the property so that it can’t be sold until the outstanding debt is paid.
- The loan application is a copy of the original application that you will have to present at closing. But if your financial situation has changed since you first filled out the application, you have to inform your lender before signing at closing.
The Transfer Documents
These make up the real estate paperwork that plays a prominent role at closing, most of which will already have been signed by the seller. These documents include:
- The deed actually transfers ownership of the property from seller to buyer, usually in legal language dictated by state law. After the deed is signed and notarized, it has to be officially recorded and made public by the county recorder of deeds so that there is an official public record of your rightful ownership of the property.
- The bill of sale transfers whatever personal property accompanies the sale of the real estate. This part of the real estate paperwork covers things like appliances, air conditioners, furnaces, security systems, light fixtures, and the like.
- The affidavit of title/seller’s affidavit is a sworn, notarized statement made by the seller that confirms actual ownership of the property and thus the right and ability to sell it. It also includes any liens or conditions or disputes that could create liens.
- Some states require transfer tax declarations because they charge a tax on the transfer of real property, so the transfer must be disclosed along with the purchase price.
The Title Documents
The last part of the real estate paperwork for Denver home buyers is that which comprises the title documents for the title company and the escrowee. The main document here is the title insurance commitment. It shows who actually owns the property (the party in the title) and any and all liens or other clouds on the titles. It’s best to have this reviewed by an attorney to make sure the title is exactly as promised in the contract and so acceptable under law and custom.
Real Estate Paperwork Made Easier
For the layman, the mass of jargon-laden real estate paperwork for Denver home buyers can seem more than a little confusing. So there’s really only one way to make it all more manageable. And that is to have a knowledgeable real estate agent – a professional who understands these things – in your corner.