Saturday, October 9, 2010
WOW! that was easy.
Have you ever purchased a home or land? Have you ever wondered where all that money paid at closing goes? Why, is it so expensive to close a loan? These are questions that I have had in the past. I just figured there is no way around it, like death and taxes everyone just pays it. However, when we finally did find the land that we wanted to buy and it was C4D (Contract for Deed) we found ourselves looking at a road less traveled when it comes to the purchase process. Neither the seller or I had ever purchased or sold anything C4D and we were not sure exactly of the steps to take. I spent a little time researching and found that the first thing to be done was to talk to the seller and come up with the terms of the loan (purchase price, down payment, length of the loan and interest rate). The man that we purchased the property from was really easy to work with and it did not take us long to come up with a deal that was win-win. I then had to find a place to get a contract. My first call was to a lawyer (several of them actually) where I found that to have a lawyer write it up and perform a closing (at $275. per hour) it was going to cost us around $1,500. At first this seemed like a good deal compared to the crazy closing cost I have paid in the past (typically $3,000 or more). I did find one lawyer that said that she would write up a contract for $250. A prime example showing that it pays to shop around. However I just felt that there had to be a way that was less expensive. I remember hearing about a site called http://www.leagalzoom.com/ and decided to look at that. I had some trouble on their site finding a contract for deed but when I did it was still $279. I again decided to keep looking for other options and there was a site that called http://www.findlegalforms.com/forms/ that said they had a down loadable, fully editable contract for deed with a 100% money back satisfaction guarantee for only $7.99. I remember saying to myself "Now thats what I am talkin about". I carefully reviewed their site and after some debate I decided to give them a try. I was very pleased with their product. The transaction was safe and secure. The file downloaded quickly, came with instructions and was of high quality. After reviewing the document there were some words and phrases I did not understand. So, I went http://www.wikipedia.org/ , typed in the phrase or word and it explained what it meant. I then made a few edits to the contract so it would read how I wanted and included the terms that we had discussed. I was done in about 2 hours. It was cool that if there was anything that I didn't like or understand I could simply change it. I had originally planned to have the contract reviewed by a lawyer at this point, but it was so easy to understand that I decided to save that money and move forward. I gave the seller a copy of the C4D and ask him to review it and let me know if there was any changes that he wanted made. He reviewed the contract for a few days and had no objections. So we set up a day to sign everything. He came to our house, we sat at our table and went through the contract together reading everything so that he knew that I had not changed anything. We all signed everything and then went to our local bank and had it notarized. The notarization was free since we were customers there. It was a low stress and actually enjoyable experience. All in all we closed on our new land for $7.99. This still leaves me asking "Why, is it so expensive to close a loan?". It still blows my mind that it was that easy. I didn't leave out anything. I highly recommend that if any of you are looking for a new property that you look at the Contract for Deed option. I will never do it any other way again.