You’ve decided to buy a house and things are going along swimmingly. You’ve made application for financing and you’ve found yourself a great agent (hopefully ME!) :). Showings of properties are going okay but you still haven’t found that “one” that you expect to fall in love with. Suddenly, a house shows up that meets all of your checklist, or at least more than any other, and it’s pretty with a yard you can see yourself hanging out in on a Saturday with family or friends.
The agent is writing up your offer and the question comes up – how would you like me to put your name on the contract? “What?” you think. Do I really have to think that hard about it? Well, no, not if you understand the typical process of real estate but most people don’t deal with real estate on a regular basis. One of the reasons this blog exists is to cover practical matters that apply to the transactions you may find yourself in when buying or selling real estate.
But, back to the name game… there are a lot of scenarios where it makes sense to really analyze how you’ll be putting your name into all of the various documents that are associated with real estate transactions. Let’s cover the basics of what you may need your name to be on in a purchase but there are certainly more than these 3 at your signing appointment:
1. loan documents – this is the trigger for all other documents and if your other forms don’t match this one it can tie up closing till it’s fixed. Most people fill these out with their first and last name – sometimes with a middle initial and sometimes without. If you have a Jr. or number (II, III) after your name you might want that on it or perhaps not. According to lenders I’ve discussed this with you can go sans the Jr. as long as you fill out another document along the way that gives all other names you may be known by, including the one with Jr. tagged on. That’s right, thank Dad for making you a Jr. all the way till adulthood. 😉 Some people want to limit the amount of detail for privacy purposes (to be more generic, I assume) since the purchase of a home becomes public record.
2. title – This document must be the same as your loan documents. Title companies don’t care so much about how your name is noted but some title and escrow firms will want the forms to reflect the same name as what is on your driver’s license – which is the most common form of identification shown at a closing. However, if your signature line is the same on your loan documents and ID it is usually okay. All of the title and escrow folks I interviewed about this subject agreed that the title must match the loan documents or they’ll flag it as a problem to be cleared up by closing.
Another area of title that comes up is if you have a common name. We have noticed about 25% of the transactions we deal with will have a person with a common name and there is typically a “confidential information form” that the title company will ask to be prepared and sent in prior to closing to make sure there are no items of record against the person involved in the transaction. Sometimes those outstanding actions affect the buyer or seller, but not always. Items that might be included in this search are liens, outstanding judgments, unpaid child support payments, etc.
3. purchase and sale agreement for real estate – this document should have your name in the same format as your loan documents. At Team Reba we ask clients up front what they want as the name on their contract. We are finding more and more that what they give us may not always be what they give their lender so we end up having to make corrections sometimes in mid-stream of a contract period. If you’re ever involved in a difficult transaction, believe me, you don’t want “just one more thing” to irritate the other party if you don’t have to, or give them a reason or opening to haggle or hassle.
