The term ‘closing’ is something you will hear real estate agents mention regularly. However, most sellers do not know exactly what losing means. Closing is the final step in selling a property and is a crucial stage. If closing is not done correctly, the entire deal could be lost. There are certain steps to be taken in the closing process i.e.
Step 1: Settle lending terms with the buyer
You and the buyer should sign and agree to the terms of the sale of your house; we have an executed contract. In this stage, the buyer and seller agree on the final price with the help of the real estate agent. All fees associated with settling the sale of the property such as appraisal and processing fees should be settled at this stage of the closing process. Both parties should ensure that they are not getting overcharged for any service. In most cases, the buyer will be using a mortgage to purchase the property. Lending agreements are not finalized until the closing process, and the buyer should wait until this point is reached. It is at this stage that properties such as the interest rate should be set. Waiting for fluctuations and expecting to time the interest rate so that you can get a low one will not work. A good interest at current market rates that the buyer is okay with should do just fine.
Step 2: Earnest money from the buyer is deposited in the Title Company
Earnest money is a way for the buyer to show his commitment. The fund is held in an escrow or trust account. An escrow account is an account opened in a Title company to ensure that all monies go to the correct party. When using a real estate agent to sell the house, he/she can provide a list of different Title companies. In most purchase agreements, the amount deposited in the escrow account will be a fraction of the full amount that the buyer should pay. The original deposit in the escrow account is often a 1% of the purchase price. This is the amount referred to as the earnest money. Later in the buying process, the client will be required to deposit the remaining amount into the account to become legal owners of the property.
Step 3: The executed contract is sent to the Title Company
Each property has a title attached to it. The name on the title indicates the current owner of the property. The name has to be changed when ownership is handed over from seller to buyer. Ensuring that the title is in accordance with the law leaves no room for any third party to claim ownership of the property. One can also acquire title insurance to be more secure of the title details. The title company helps ensure that no one else can claim the property before the sale except you.
Step 4: Conduct a final inspection
If there is an option, the buyer can use this time to inspect the property. Any repairs you agree to should be completed with receipts before closing. A final inspection is in order especially from the buyer’s point of view, and it should be done with the help of a professional who will conclusively ascertain the state of the property. The final inspection should also include an inspection on pests. It is separate from a general home inspection where the latter is usually a structural inspection. The house should be scrutinized so as to ensure there is no vermin even in the most remote of areas. If there are any pests, extermination should occur well before the deal is closed. The initial purchasing agreement should be contingent on many factors such as the completion of repairs, conduction of a home inspection and many other terms and conditions. When doing a final review, you should cross off the contingencies from the list to ensure that everything is in order. The buyer should perform a final walkthrough of the property so as to ensure all is in order all the repairs to be done in step 4 have been done, and all is well.
Step 5: Have all documents ready
The real estate agent will work with the title company to collect all the necessary document.
Some of these documents include transfer documents such as the deed, transfer tax declaration, the bill of sale, and the affidavit of title or seller’s affidavit, home loan documents like the note, the mortgage, loan application, loan estimate and closing disclosure among others.
Step 6: Closing statement
The final stage of the closing process is putting everything in writing. The buyer should do the painstaking work of going through the fine print himself or risk getting surprised further down the road. After signing the relevant papers, and Seller is paid Funded, the buyer can move into the property. When we close, we work for a document known as closing statement. The closing statement is a document that tells you the charges associated with the sale of your house and what you can expect to the net after the sale.
To find out more about the closing process for sellers visit firstname.lastname@example.org or call Adrian Garza-Delgado at 210-595-9492.