After months, and sometimes years, of searching for the perfect home, reaching the closing table can feel like a relief. And while getting here does put you one step closer to owning your dream home, there is still a considerable amount of work to be done before the deal is sealed. Like all things in real estate, the closing process can be both complicated and emotional.
Here’s who and what you need to know about this final step before becoming a homeowner.
Who’s Who at the Closing Table
While all closings are different there are a few key individuals you can expect to work with when you’re closing on a home.
Closing Agent: An impartial agent who works to make sure everyone has the correct paperwork and necessary documents.
Attorney: Hired by the buyer, a real estate attorney will oversee the legal transfer of the property.
Title Company Representative: This person is in charge of researching and transferring the property’s title.
Home Seller: The current property owner.
Seller’s Agent: The real estate broker representing the seller.
The Mortgagor: You
The Mortgagee: Your lender who works to get your loan approved within the specified period of time.
Your Step-by-Step Guide to the Closing Process
Closing on a home takes on average 30 - 45 days. Here’s what you can expect during a typical home closing.
Submit your earnest money.
This is money you submit, in good faith, before the closing. It protects the seller in case you back out of the deal and it is held in an escrow account.
Hire an attorney for the Attorney Review Period.
The buyer is responsible for hiring their own real estate attorney to oversee the Attorney Review Period which typically lasts 5-10 days.
Obtain the home Inspection and disclosures.
Send the seller's attorney the Active Inspection (A/I) letter.
This signifies that the contract is pending the completion of the home inspection.
Negotiate repairs and/or closing credits with your attorney and REALTOR®.
After review and negotiations, the attorney will sign off on the A/I letter.
Submit the balance of your earnest money.
Enter loan contingency.
You’ll work closely with your lender to ensure that your loan is approved by the loan contingency deadline.
Order an appraisal.
The escrow agent accepts the escrow and opens a title order.
Legal papers are ordered.
During this process tax information, loan payoffs, property surveys, inspection reports, and insurance related to the property will be reviewed.
A title search is conducted to verify the property’s legal owner.
The title company will review deeds, mortgages, liens, wills, divorce settlements, and other documents to determine the property’s current legal owner. A report is sent to both parties.
Once a “clear to close” is received, the seller’s attorney schedules the closing.
The deed is signed under the supervision of the escrow agent.
Payment is forwarded to the lender by the escrow agent.
Transaction documents are recorded in the corresponding county.
The title insurance policies are prepared and sent to you and the lender.
“It can be hard for homebuyers to wait through the lengthy and tedious closing process,” says Joe Zimmerman of the Zimmerman Group. “But it’s important to let these professionals take their time and make sure the deal is solid. The wait is worth it to avoid problems down the road.”
You can’t make it to the closing table without starting your home search.
Contact us today for a free home buying consultation.