You've done your research to ensure a smooth real estate transaction. You've successfully navigated open housing, finding the house of your dreams and crunching numbers to verify it was a financially feasible option. This is your dream house, and you've just made an offer to buy. A counter offer might even have been presented by the seller. By the culmination of the negotiations both you and the seller had accepted the price and terms. What's the next step?
That would be the closing on your new home. The property's legal transfer is finished on this day together with the new buyer and the home's previous owner. The buyer receives the keys to his or her new home once this process is completed.
Not too difficult, right? To ensure a proper closing, there are several key things that need to take place, in reality. By presenting a homeowner's insurance receipt, the buyer needs to prove to their mortgage lender that they purchased insurance on the property. To prove that the price listed on the contract is what was agreed upon, the buyer and seller also have to sign paperwork to that effect. Depending on what was agreed upon, closing costs also need to be paid to the closing agent by the buyer, seller or both. Both buyer and seller must review all other relevant documents after this.
In addition to paperwork, an escrow account must be established. The closing agent does this in order for the buyer to cover things like property tax, homeowner's insurance, interest that accrues in the interim and sometimes even private mortgage insurance. The buyer must then sign all documents associated with the mortgage on the property and execute them by signing. At this point, the lender can present the closing agent with a check that will cover the agreed upon mortgage amount to purchase the home.
Lastly, the buyer receives keys to the property, as well as its title. The title and sometimes other legal documents must be recorded so there is a public record of the buyer's new interest in the property. If property isn't properly recorded, it opens the buyer up to other peoples' claims that they own the property. In some instances, a shifty seller sold the property to two separate people. Depending on the state in which you live, in some instances, the person who records their title first is considered the true owner. Recording is the final step in the closing process and, once complete, the house fully belongs to the new buyer.
That would be the closing on your new home. The property's legal transfer is finished on this day together with the new buyer and the home's previous owner. The buyer receives the keys to his or her new home once this process is completed.
Not too difficult, right? To ensure a proper closing, there are several key things that need to take place, in reality. By presenting a homeowner's insurance receipt, the buyer needs to prove to their mortgage lender that they purchased insurance on the property. To prove that the price listed on the contract is what was agreed upon, the buyer and seller also have to sign paperwork to that effect. Depending on what was agreed upon, closing costs also need to be paid to the closing agent by the buyer, seller or both. Both buyer and seller must review all other relevant documents after this.
In addition to paperwork, an escrow account must be established. The closing agent does this in order for the buyer to cover things like property tax, homeowner's insurance, interest that accrues in the interim and sometimes even private mortgage insurance. The buyer must then sign all documents associated with the mortgage on the property and execute them by signing. At this point, the lender can present the closing agent with a check that will cover the agreed upon mortgage amount to purchase the home.
Lastly, the buyer receives keys to the property, as well as its title. The title and sometimes other legal documents must be recorded so there is a public record of the buyer's new interest in the property. If property isn't properly recorded, it opens the buyer up to other peoples' claims that they own the property. In some instances, a shifty seller sold the property to two separate people. Depending on the state in which you live, in some instances, the person who records their title first is considered the true owner. Recording is the final step in the closing process and, once complete, the house fully belongs to the new buyer.
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