The closing process is the final step in a real estate transaction. Although this process seems overwhelming, it can be a smooth experience with proper planning.
If you plan to purchase a property, we are here to provide insights about this process.
Closing Process Timeline
You may expect to close 30 to 45 days after the contract is signed. However, this timeframe can vary depending on different circumstances, such as mortgage approval and the complexity of the transaction.
The Escrow Process
You are officially in escrow once both parties have signed the purchase agreement. Escrow refers to a financial arrangement in which a third party, the escrow agent, holds the deposited earnest money.
The escrow process typically involves the following:
- Opening the escrow account
- Completing the inspection and repair requests
- Mortgage application and underwriting
- Acquiring homeowners insurance and title insurance
- Loan approval
- Final walk-through
- Closing appointment
Is Earnest Money Refundable?
NAR, Earnest Money & Escrow Real Estate: There are several scenarios when a buyer could face forfeiting their earnest money. If a buyer waives contingencies, ignores timelines, or gets cold feet, it could mean losing the earnest money deposit.
When it comes to real estate, a case of buyer’s remorse could be even more painful than a lost deposit. To avoid both, ensure the home you’re bidding on is “the one.”
How Much Are Closing Costs?
Zillow: Buyer closing costs are usually between 2% to 5% of the home’s purchase price. For example, if the home costs $300,000, you might pay between $6,000 and $15,000 in closing costs.
A lot of factors impact how much you’ll pay in closing costs. For buyers, it depends on your loan program, the size of the loan, and individual lender practices. For sellers, it comes down to what you’ve negotiated in terms of concessions and agent commission.
Track Your Closing Costs
Be prepared and know who’s responsible for the fees and expenses at the closing table. We have prepared a worksheet to help you track your closing costs.
A homeowners insurance policy will protect you against certain losses and damage to your new home and is generally required by lenders before closing.
Moreover, some lenders will collect the money you owe for homeowners insurance as part of your monthly mortgage payment and place it in an escrow account, paying the insurer on your behalf when the bill is due.
Title insurance protects your ownership right to your home; from fraudulent claims against your ownership and mistakes made in earlier sales.
Additionally, in some states, it is customary for the seller to purchase the policy on your behalf.
Conduct a final walk-through of the property before closing. To guarantee that the house is in the same or better condition if you negotiated repairs after the home inspection.
Here’s a detailed list of what to check on your final walk-through.
Transfer of Ownership
Once all the documents are signed, funds are transferred, and the closing is complete, property ownership officially transfers to you.
Congratulations! At this point, you will receive the keys to your new home.
Preparation is vital; from gathering all necessary documentation to conducting a thorough home inspection.
Also, staying in close communication with your real estate agent and other parties involved will keep you updated on the progress.
Furthermore, we understand that the closing process can be daunting, and we are here to help you fill the gaps in your home-buying knowledge. Call us, and we will establish a plan to achieve your personal real estate goals.
Finally, best of luck on your journey, and may your new home bring you years of happiness and fulfillment!