Once you’ve decided on a property, or once someone has decided to buy your property, it’s time to complete the deal. Generally, there are ten primary steps involved in completing a real estate deal once the purchase contract has been signed. These steps are as follows:
1. Open up an escrow account. You’ll need a neutral place to deposit the funds that will be used to purchase the house. An escrow account will hold the funds, as a guarantee that they are present, and then distribute the funds to the seller once the terms of the deal have been agreed to. When the escrow is formed, the buyer will make an “earnest money” deposit to show the seller he or she is serious.
2. Conduct a title search and buy title insurance. The title search will make sure that the seller owns the property free and clear. The title insurance will cover the purchaser in the event that an unknown third party tries to make a claim on the property at a later time.3. Consider getting a lawyer. A real estate lawyer can help you navigate your real estate transaction to prevent errors and problems later on down the road.4. Obtain pre-approval for the mortgage. The buyer will next reach out to a bank or lender to obtain pre-approval for a mortgage. This lets the seller know that the buyer has strong financial backing to follow through with the deal.5. Negotiate closing costs. When setting up an escrow account and securing a mortgage you may need to negotiate the removal of unnecessary bank fees.6. Carry out a home inspection and pest inspection. You may want to hire a neutral party to inspect the home for any problems you haven’t noticed. If a problem is found, the seller should resolve the issue, or renegotiate the deal.
7. Remove contingencies. Contingencies will be contained in your purchase contract. These are a list of terms that, if not satisfied, could render the purchase contract invalid.8. Fund the escrow. It’s time to deposit the money from the mortgage into the escrow if it hasn’t already been done.9. Carry out the final walkthrough.10. Sign the papers.
These are the ten steps required to close on a real estate transaction. Whenever carrying out a real estate transaction, be sure to understand your legal rights and obligations to ensure the deal is finalized appropriately.