Real estate closing is the final step in the process of buying, selling, or financing a home. In most jurisdictions, closing also refers to the transfer of title from the seller to the buyer. This article discusses what the process is like, and its benefits.
What is the Real Estate Closing Process Like?
The closing process typically begins when the seller accepts your offer to buy a home. You will then give your lender an earnest deposit, usually in the form of a cheque. At that point, you will also be given loan documents for signing.
These documents are for review only and not yet for signing. Before signing, you should read these documents carefully and ask questions about anything you do not understand. Closing insight softpro can offer any support needed. The next step is to have the property appraised.
This is done at the lender’s expense and requires you to allow the appraiser access to your home so that he can verify its condition and features and compare it with other similar homes in your area that have sold recently.
Once you have signed all of your loan paperwork and it has been reviewed by all parties involved, you will be contacted with a date on which both parties will meet at the Title Company office or whatever other location has been agreed upon. The respective attorneys must be present to complete the transaction. At this time, you will be required to pay any remaining funds due at closing in certified funds.
Real Estate Closing Process Explained: What Happens at Closing?
Entering escrow
Entering escrow is often the first major step in a real estate closing. During escrow, the following items are checked out by both parties:
- Sales contract for accuracy
- Title to ensure clear ownership
- Property appraisal
- Homeowner’s insurance
- Mortgage approval
You may receive a request from your lender to provide additional documentation such as bank statements or tax returns during this time.
Title company work
Title company work is a very important part of the real estate closing. The title company’s job is to ensure that the property you are buying has a clear title.
To do a title search, they will go back in time and check all the previous owners of the property to make sure that there are no outstanding liens or other issues with the title.
Obtaining insurance and permits
Many lenders require that you have certain types of insurance in place before they sign off on your loan. These include homeowners, flood, and windstorm coverage. They may also require that you have a termite inspection, building permits, final inspections, and proof of ownership for any fixtures or appliances that will remain with the house. Your real estate agent can help you with this process.
Signing loan and closing documents
You’ll first sign loan documents with your lender and receive copies of all your paperwork. Then you’ll sign documents that transfer ownership of the property from the seller to you and any other documents required by your lender or state law.
Finally, you’ll receive the keys to your new home!