house closing process – Wow! Your proposal has been approved. You are now prepared to close. It’s not as easy as just picking up the keys, though. Generally speaking, the process takes 45 days, but depending on the kind of funding you obtain, it may take longer or less time. What steps are necessary to close? To help you prepare, we have summarized the entire home closing procedure.
A buyer’s guide to house closings : You must have a real estate lawyer on your side during this procedure. You’ll require a somebody who can clarify all of your legal paperwork so that you may close, obtain title, and evaluate the contract.
1. Set up an escrow account
You should open one today if you haven’t previously done so for your earnest money deposit. A third party account known as an escrow account is used to retain the money required to complete the house purchase transaction. Escrow accounts can also be utilised to pay for insurance and taxes.
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2. Secure title insurance
In order to ensure that the property is free of liens and that the seller has the legal authority to transfer ownership to you, your lawyer will do a title check, looking up public records.
If there is a problem with the property’s granted title, title insurance is designed to shield you from financial loss. You are protected if:
- Title theft
- Unpaid taxes and assessments
- heirs to the property who are unidentified or secret
- filing and recording errors with regard to legal documents
The cost of title insurance is not a recurring expense. It’s really a one-time cost included in closing expenses.
3. A final walk-through or inspection:
You should do an inspection before closing on the house, unless you’ve waived that condition. You’ll be able to resolve any issues or flaws this way and steer clear of unpleasant surprises once you’ve moved in.
4. Finish off your mortgage:
You must complete a mortgage application before closing. If you are already pre-approved, which is highly advised, this process goes considerably more quickly. In order to confirm that the house is genuinely worth the amount they are loan you, your lender will also want a home evaluation. You might need to renegotiate the home’s price if the assessment is low
5. Complete and deliver your board package (co-ops)
To complete and submit your board package when purchasing a co-op, you will need to collaborate with your agent. The evaluation period varies, but it usually lasts six to eight weeks. If everything seems good, the board will schedule an interview. After the interview, you need to hear something within a week.
6. Fulfill Funding Needs
When you put your signature on the purchase agreement, you most likely paid earnest money. Earnest money is a payment provided to the seller to demonstrate the buyer’s good faith, commitment, and sincere interest in the purchase of the property. If the buyer backs out, the earnest money goes to the seller as compensation. The buyer receives their money back if the seller cancels.
You’ll need to put down more money in escrow in order to complete your transaction. Before the agreement is closed, it is essential to make the various other required payments because the original earnest money is typically put to the down payment. If this is not done, the sale may be cancelled and the earnest money will be returned to the seller.
7. Attend the closing and finish the paperwork:
You’re on the verge of winning. You must bring the following paperwork and your real estate lawyer to this meeting:
- Government-issued identification, such as a driver’s licence
- Receipts for wire transfers or cashier’s checks for the remaining closing costs you must pay
You’ll feel as though you’re signing a tonne of legal paperwork because, well, you are. You will look over and sign:
- Escrow disclosure statement: Describes the insurance and tax expenses that will be included in your monthly payment.
- Deed of trust: A document stating that, in the event of failure, the lender may seize the property
- A promissory note guarantees that you will pay back the loan.
Don’t let the legalese intimidate you. You can ask any questions you have and get assistance from your lawyer as you complete the documents. Additionally, it’s customary to include a right to cancel clause, which normally provides you a few days to get out of the agreement if necessary.
8. Get the keys & It's time to celebrate!
Although waiting is frequently the most difficult stage, all of these processes may seem daunting. All that remains is for you to move in, celebrate, and decorate once you have the keys.
The conclusion: Although it could seem like a lot of work, the closing process is worth the time and effort to do it right rather than rushing and signing a contract you don’t understand. Watch out for any pressure to complete the sale quickly. Real estate brokers and other parties who are assisting you will want their cut, but they won’t be available to consider the issues a terrible agreement can cause you in the long term.