I have already listed my home with a realtor so please NO responses indicating I should. We are now going to try to sell our home ourselves. I have already looked at FSBO.com as well as a few other sites. The legal aspect seems confusing so I think we will hire a real estate lawyer (unless someone can give me a better understanding of what to do with the documents you can download). My question is once I have a buyer (fingers crossed) how do I deal with my exsisting mortgage? Do we pay that off before the deed is changed with the profit or does it get paid off after? Do I contact them or does the lawyer handle all of that? Is that an extra document? Any help on the LEGAL aspect of selling my home and the exsisting mortgage would be great. I all ready know about the listing, advertising, and setting my price end of it.How do I pay off my exsisting mortgage when I sell my own home?
The existing mortgage will be retired at the time of closing by the escrow/title firm. The buyer's money will be used to pay off your mortgage and any other costs you incur in the closing process, and you will receive a check for the remaining balance.How do I pay off my exsisting mortgage when I sell my own home?
When you sell real estate, the buyer needs to take over a clear title on the property, which means no liens from the previous owner will follow the property. Your real estate attorney or escrow agent will disburse all of the funds for you at closing and pay off any liens (mortgages) with the proceeds of the sale. Then they will record the new Promissory Note and Deed of Trust with the county where the property exists. Just be aware, which it sounds like you already are, that if the proceeds of the sale are not high enough to pay all existing liens on the property, plus any fees incured by the sale, then you will need to come to closing with any money needed to pay off these balances.
When ownership changes hands the Seller gives the Buyer clear title (no liens like mortgages) and the Buyer gives the Seller some $$$. The title company used will take care of paying off your current mortgage from the proceeds of the sale via a wire to that companies account. Be sure there is enough proceeds from your sale to cover the current mortgage.
All you need is a good title company. They will handle everything from the purchase agreement to the closing. You can ask specifically for a F.S.B.O. package and it will contain all that you need.
To answer your question though, you will call your mortgage company and ask for a payoff up to the date of closing, which will include all principal plus interest owed until the date that they physically get paid off. Your title company will disburse the funds to them at the closing.
The buyer is responsible for choosing a title company to do the settlement. The title company will get any existing payoffs and those will be satisfied from your proceeds at closing. The title company will provide the legal aspects of the closing/settlement. You may want to have an attorney or a friend with real estate experience review the sales agreement before you sign it.
Once you get an offer accepted, you should ';open'; up an escrow at a nearby escrow/title company. You hand them your executed contract. They'll need personal info (i.e.SS#, address, etc. for buyer %26amp; seller).There are many companies to choose from. You would pay pretty nominal fees to the escrow company to order payoffs, do a title search, and handle much of the paperwork.
In fact, you'd be likely using a escrow/title company with an agent anyhow. But to answer the main question, your mortgage will get paid off by the title company once they receive funds that the new buyer submits to escrow (whether cash or loan). Then title will be recorded into the new owner's name....the recording procedure is another service the escrow/title company will handle for you. The escrow company acts as a neutral 3rd party that handles the money and paperwork.
Hiring an attorney or paying a REALTOR a nominal fee to oversee the transaction details once you have an offer on the table is not a bad idea though.
Once you set a closing date, call the bank and order a payoff statement. Send a copy of the payoff statement to the escrow or title company. They will verify the numbers. At closing, the settlement agent collects the money and writes out checks to, among other things, the holder of the existing mortgage. The bank will send the paperwork to the title company to file, and you will eventually receive back the note and mortgage.
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