You should know about those documents so as not to miss any details when purchasing a home.
During the transaction, there are many files that you will receive and need to review. Here, I point out six documents that you should pay much attention to.
Preliminary Title Report
The “Preliminary Title Report” will disclose any title defects, liens and encumbrances of the property. This document is extremely important because it will assist you to Clarify if the house has any debts, such as Tax Lien (tax lien), mechanic’s lien (repair worker’s lien), etc.
NHD Report (Natural Hazard Disclosure Report)
The NHD Report will list the geographical location of the house, whether it is in an earthquake zone, whether it is in a flood-affected area, whether it is in a fire high-risk area.
In addition, it will also list other environmental disclosure within 1 mile of the house, such as whether there is a superfund ( High-tech waste disposal pollution), whether there are gas pipelines passing through, whether there are facilities such as leaking underground storage tanks (LUST) that may increase adverse risks to your health and safety.
Seller’s Disclosures Forms such as Real Estate Transfer Disclosure Statement, Seller Property Questionnaire, and FIRPTA
Real Estate Transfer Disclosure Statement (TDS): This report is to inform buyers of the true condition of the property being sold by the seller. One of the key points is to look at the Yes or No. If the seller answers Yes, an explanation may be provided. Therefore, when you review TDS, please pay much attention to the yes section.
Seller Property Questionnaire(SPQ): Note that the above TDS is not a completed list of disclosures, so the Seller property questionnaire is a supplementary questionnaire to the TDS. SPQ includes many questions not covered by the TDS, and also requires the seller to provide additional explanations.
Foreign Investment in Real Property Tax Act, FIRPTA): According to regulations, when foreigners sell the property, they must pay withholding tax. Therefore, every seller needs to provide SELLER’S AFFIDAVIT OF NONFOREIGN STATUS (FIRPTA) OR QS(Qualified Substitute) provided by Escrow to explain whether the seller is a foreigner. If the seller is a foreigner, the seller must pay withholding tax.
Agent Visual Inspection Disclosure (AVID)
Agents go to the house to inspect and record problems that they saw. for example: there are scratches and holes on the walls, cracks in the stair treads, cracks in the window sills and so on.
Home Inspection Report
Usually the home inspection takes about two to three hours. If the home inspection is scheduled by the buyer, the buyer can inspect it with the inspector. The inspector will usually share while inspecting, and explain the precautions or inform the problem. The inspection includes the basic structure of the house, foundation, roof, power supply system, water supply, heating and cooling equipment, water heater, smart alarm and garage, etc.
HOA Documents
The HOA has its own regulations, such as the allowance of renting ratio. It is very important to clearly understand the regulations and fees of HOA before buying a house!
The above is the information for Six Important Documents In Escrow Process. If you have any questions during the process of buying or selling a house, please feel free to contact me.