You’ve been hearing the word “closing” from your real estate agent, but you have no idea what it means. This term is used to describe the process of finalizing your real estate deal. A real estate transaction isn’t like going to the store and buying a gallon of milk. A lot of paperwork needs to be signed and multiple steps need to be carried out.
Here are the steps involved in “closing” a real estate deal:
- Open your escrow account: This account allows you to hold the money in a third-party account, to ensure that sufficient money is there to buy the house and that the money doesn’t suddenly disappear.
- Perform a title search and buy title insurance: This ensures that no problems arise with a home that the alleged owner doesn’t have the right to sell.
- Get mortgage approval: You should next start applying for mortgages and speaking with mortgage brokers and banks to try to get the best mortgage deal you can find.
- Negotiate your closing costs: Escrow companies may charge extra and unnecessary fees. Make sure your real estate attorney or agent helps you negotiate these fees for a good price.
- Do a home inspection and pest inspection: This ensures that there are no surprise problems with the home that would affect its value.
- Re-negotiating the offer: If the inspections reveal problems, you can renegotiate the deal to obtain a better price.
- Get your interest rates secured: Your lender should be checking interest rate activity to lock in the best interest rate possible, and it’s at this stage when this will happen.
- Remove the contingencies: Your real estate offer should have various steps that needed to be completed. By this time, they should have been done, and the contingencies can now be removed in writing.
- Fund the escrow: At this stage, you will deposit the purchase money into the escrow account so the seller can receive the money.
- Final walk-through and the signing: Now you will walk through the home to check that nothing has changed regarding its condition, and then you will sign all the necessary paperwork.
Having a real estate lawyer by your side during the closing of your home can be of great assistance. Your real estate lawyer can provide peace of mind while ensuring that your legal rights are protected and secure.
Source: Investopedia, “12 Steps To Closing A Real Estate Deal,” Amy Fontinelle, accessed Aug. 01, 2017