The Closing Process Explained
What is Closing? Closing a real estate deal is stressful and may prove daunting due to the procedural formalities. After all parties have agreed to proceed to the closing stage, there's a whole new level of documents
By Truman Fleming · · 2 min read
What is Closing?
Closing a real estate deal is stressful and may prove daunting due to the procedural formalities. After all parties have agreed to proceed to the closing stage, there's a whole new level of documents and paperwork involved. Before arriving at the final stage of signing the ownership papers, these are the steps involved in the closing process from when your offer is accepted by the seller.
This article will guide you through the expected process involved in closing a deal quickly.
OPEN AN ESCROW ACCOUNT
Creating an escrow is important to create an impartial ground for money safety. The escrow will be the third party with no direct involvement in the sale. The escrow account will hold the money and ensure swift transaction after the process is completed.
HIRING CLOSING AGENTS
Since you have no direct knowledge about real estate, hiring a professional closing agent will be beneficial. This agent will help in securing your interest when sorting out the paperwork involved and also break down difficult situations for your understanding. This is important, but many people consider it as optional.
TITLE SEARCH IS IMPORTANT
Running a title search should be done as early as possible before full commitment to the closing process. Title search helps to unveil existing issues such as property taxes and other complications that could impact your home takeover. It is better to be safe than sorry.
SCHEDULE CLOSING DATE
After meetings with all of the parties involved, select an unanimous closing date for the sellers to move out of the home. Once this is confirmed, you can continue with other processes while preparing to occupy the new home.
HOUSE INSPECTION
A house inspection is integral to identify the various challenges or issues in the house that need fixing. Not everyone can identify this, so it is better to enlist the help of a professional inspector. They will point out all of the issues with the house that requires fixing so you don't have to do it with your money.
COST NEGOTIATION AND APPROVAL FROM LENDER
Negotiation and renegotiation are always forthcoming until the final payment is made. Negotiate the closing costs from the lender and be adaptive to entertain other flexible options that can save money. Average closing fees can rise up to $6,000, so try to minimize this as much as possible.
MEET THE FUNDING REQUIREMENTS
On the closing date, the money is wired to the escrow for the seller and other costs. When the negotiation procedures are finished, your ownership interest is confirmed and further processes are continued.
DOCUMENT VERIFICATION AND SIGNING
This can be daunting so you will need the help of your lawyer and real estate agent. The golden rule is to never sign anything until you understand everything about it. Check for all of the required papers and avoid being pressured into signing in a hurry. Compare closing costs, interest rate, and argue any fees beyond the agreement.
COLLECT HOUSE KEYS
After clearing all of the required processes, proceed to sign the documents and collect the keys to your new home.
Usually, this process is expected to last between 30 and 45 days depending on the various issues that come up. Whatever the case may be, the closing process should be completed within this time frame.
