5 Real Estate Terms Every Park City Homebuyer Should Know
Realtors often speak in a lingo that may not be easy to understand to Buyers. Additionally, different states use different terms or have different rules or laws. If you are purchasing property in Park City, Utah or anywhere in Utah, for that matter, here are 5 real estate terms every Buyer should know.
Settlement vs. Closing- in Utah, Settlement is when both Buyer and Seller have signed their documents and delivered the documents to the title company, and the Buyer has wired funds to the title company. It is NOT when you get keys to the property. Closing is when the bank has funded its portion of the funds and the title company records it with Summit County. Only after recordation do you own the property and have access. Too many times Buyers have thought they would be handed the keys when they sign. It’s a Friday afternoon and the wire from the bank doesn’t show up until Monday. Guess what? You cannot stay in your property for the weekend, because you don’t own it yet. Your Realtor® should be explaining this to you when writing the contract and choosing your dates for Settlement.
Disclosures- Section 7 of the Utah Real Estate Purchase Contract defines disclosures a Buyer will receive by the Disclosure Deadline. Disclosures are not to be taken lightly and need to be read at your earliest convenience. It is the responsibility of the Buyer to read the disclosures. It is the responsibility of the Realtor® to make sure the Buyer receives the disclosures by the Disclosure Deadline. Reading HOA documents may be boring, but that is where you may find out about possible HOA assessments, or rules that do not work for you, such as a pet policy. Property management contracts, rental income and booked rental dates will be included. Not to mention, the title report which ensures that the property can be sold and doesn’t have liens against it. There are other disclosures if purchasing a property with water rights and easements. Suffice it to say, the disclosures are an important part of your transaction. If you don’t have time to read them, then it is best to hire a Utah real estate attorney to help you. It is pretty rare that an attorney is needed, as long as you do your reading assignment.
Due Diligence- This is the phase of the purchase timeline when you read your disclosures (sounds repetitive but it’s a must...I sound like my mother!). Have professionals inspect the property, read the inspection reports and ask a lot of questions. And I mean a lot of questions, because at 5 pm on the Due Diligence Deadline your earnest money will become non-refundable. You want to make sure there are no safety issues with the property you purchase, and if there are, are they fixable and at what cost? Due Diligence Deadlines should be well thought out. If you ask for too long of a time period, your offer will be less attractive. If you ask for too little time, you may not have enough time to get the proper bids for repairs. The deadline can be re-negotiated for a justifiable situation. If you live in Park City already, two weeks should be enough time to get inspections, read the reports and get bids.
Exclusions and Inclusions- If you are purchasing a Park City full time family home, I would not expect furniture to be included, but usually all appliances are included, with some exceptions. If you are purchasing a vacation home, often times the Seller will either include furniture or sell it on a separate Bill of Sale. Artwork is rarely ever included. A thorough Realtor® will provide an inventory list with both inclusions and exclusions, signed by the Seller. The inventory list will be with the disclosures.
Walkthrough- Since we have so many second homes in Park City, and the Buyers are not present at the end of the purchase timeline, often times this step gets missed. However, it is important. No more than 7 days prior to closing, the Buyer may do a walkthrough to make sure what was supposed to be included is present, and that the repairs have been made. What if the Buyer can’t come back to town and plans on signing all closing documents remotely? I highly suggest hiring your inspector to re-inspect the property to make sure the repairs were made. Or better yet and a best practice is to get a credit at closing for repairs and make them after you own the property. This way, the repairs are made to your satisfaction.
Wow, what a boring blog. I agree. But understanding these terms will help manage expectations and create a stress free transaction. Having an agent who actually explains the Utah Real Estate Purchase Contract is crucial for a successful and happy closing.
If you have any other questions about how the real estate purchase process works in Park City and/or want buyer representation, please reach out to me. I am happy to help.