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Regional practices for closings differ, but results are the same
By Edith Lank | Columnist
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Published: 7/31/2010 11:05 PM

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Q. Can you comment on the pros and cons of using a "real estate settlement" company versus an attorney in a real estate closing?

A. I wonder where the property is that you're talking about. In some states, notably New York and New Jersey, law firms usually handle closings. That's just a matter of local custom, though. Writing for the whole country, I've found all sorts of different procedures.

In some states, including California, escrow companies handle closings, and buyer and seller may not even meet. In other states, real estate brokers can conduct closings. In New England, the process is often referred to as "passing papers." There you might hear a buyer say, "we're going to pass papers on the house next Wednesday."

And in answer to your question: I'm sure the same legal work is performed somewhere along the line in every case, no matter the local procedures. It's safe to follow the usual custom in any particular area.

We're trying to get a loan to buy a house, but my husband had a five-month job gap. My question is if the job gap will affect us getting a loan?

A. If the rest of your qualifications are OK, and if your husband has been on his present job for a while, I don't think the unemployment will make much difference.

Our bank appraisal came back low. They said the home is worth less than originally in the contract, so we can't get a large enough mortgage. So, we either need to renegotiate for a lower purchase price or pay the difference out of our pocket, which of course we can't. I am trying to get the seller in a dialogue about renegotiating the contract.

That being said, of course I am really nervous. I just want to know what fodder I have for the negotiation, besides that the value was obviously inflated, banks are being more conservative, and if she tries to sell it to someone else for that price, she will probably run into the same problem again.

A. Your last statement is the best argument in your favor. But you might suggest that the seller request a reappraisal. No matter how expert, an appraisal is only an estimate of value. One by a different appraiser just might come in a bit higher, which would ease the problem somewhat.

I have really bad credit and no money saved for a nice down payment. I also don't have the ability to save as I'm a single mom to three with an extremely tight budget. I have to move out of my apartment soon, but I'm having a difficult time finding rental property in my budget for the square footage needed. Unfortunately, staying where I am now is not an option.

Because of this, I've thought about whether or not a low- to no-down payment mortgage would be a possibility for me, and if so, if it's a good idea. Any advice? I don't want to strap myself into a mortgage that I drown in, but I also can't come up with a high monthly rent that keeps my family and (me) in big-enough housing.

A. With bad credit, no down payment and a tight budget, you won't be able to get a mortgage loan. I'm afraid you'll have to keep looking for a rental. Perhaps you can find some government program to help you. Ask for advice from your local welfare office.

We used a quitclaim deed to sell our home to a so-called friend. After six months, he has not recorded the document with the recorder's office legally changing ownership, which has me still liable for the property and any outstanding debts, such as sewer and taxes. He presently has a tenant residing in the mobile home who is destroying the property, not to mention the code violations that are an eyesore in the neighborhood.

With no homeowners insurance, I am also the one liable for any injuries to renters or others hurt on the property. We have approached him many times about taking care of his obligation, but he has done nothing. We never would have dreamed this would happen. We are still the legal owners, but what are our options?

A. Legally, the buyer becomes the owner the moment a signed deed is accepted. Recording is not required to complete transfer of ownership. You might have trouble, though, trying to explain that to the tax authorities or your insurance company. You should definitely consult a real estate lawyer as soon as possible.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

2010, Creators Syndicate Inc.