The Home Purchase Settlement Process

Your Agent

A real estate agent is the first stop on the way to buying your new home. The Virginia General assembly enacted a statute, effective October 1995, which defines a real estate agent’s responsibilities with respect to customers and clients. Your real estate agents will provide you with documents necessary to create an agency relationship, and will make the disclosures required under the statute. Your agent will help you choose the home that best satisfies your needs, desires and budget. Your agent will discuss with you the basics of your financial eligibility for loan qualification and ultimately, the price range you can consider when looking for a home. Your agent will then look for a multiple listing service to locate homes on the market that fit within the parameters of your budget and your physical preferences (i.e. location, no of bedrooms, lot size, proximity to schools and churches, etc.).

Once the search the focus of your search has been narrowed, your agent will begin showing houses. Your agent will go to great lengths to find exactly what you’re looking for in a property. Work with your agent to see any homes in which you are interested. Agents may show you homes listed in the multiple listing service and also homes “for sale by owner”.

The Sales Contract

Once you have chosen a home, your agent will help you write a purchase contract. Through your agent, you will submit your terms of your purchase offer to the seller and listing agent. The seller may accept your contract, in which case, you will have a ratified contract.

In many cases, however, the seller will counter your offer by changing some terms such as the price, seller paid concessions, settlement date, etc. This counter offer will be presented to you by your agent. You can then accept it reject it or counter the seller’s counter offer. These exchanges will continue until the contract is acceptable to both parties, at which time you will have a ratified contract.

Know Your Rights

The commonwealth of Virginia’s Real Estate Settlement Agents Act (RESAA) and the real estate Settlement procedures Act (RESPA) have provisions regarding the buyer’s right to choose the settlement agent and the provider of title services.

RESAA VA.CODE ANN.55-525.23 provides that:

    1. The buyer has the absolute right to choose the settlement agent.

    2. The buyer’s choice of settlement agent may not be varied by agreement and may not be waived.

    3. The seller may not make the use of a particular settlement agent a condition of sale.

RESPA Title 12 USC, Section 2608 provides that:

    1. No seller of property purchased with the assistance of a federally related mortgage loan, shall require directly or indirectly, as a condition to selling the property that the title insurance be purchased from any particular title company.

    2. Violation will result in the seller being liable to the purchaser in an amount equal to three times all charges for purchaser’s title insurance.