Featured News 2014 What Does It Mean To Close a Real Estate Deal?

What Does It Mean To Close a Real Estate Deal?

Steps to Close a Real Estate Deal

Shopping for a house involves much more than finding one you like and signing a paper to transfer ownership. While you will need to sign papers, and many of them, closing on a home and making it yours is a lengthy process. Once your bid on the home has been accepted, there are a number of steps you must go through before you can get the keys to your new home and begin moving in.

The steps to closing a real estate deal include the following:

  1. Hire a real estate attorney. A real estate lawyer will look over all the documents and make sure that there are no problems.
  2. Put the home in escrow. Escrow is an account held by a third party on behalf of the other parties in the transaction. Since there are significant amounts of money and documents involved in a real estate deal, using this third party can prevent one person from getting ripped off by the other.
  3. Obtain title insurance. It is important to check to make sure that there are no other claims to the title that can cause problems for you down the road. Once the title has cleared, you should insure the title.
  4. Determine closing costs. Escrow is not a free process, and there is a bottom line for these third party services. Checking to make sure the escrow company did not fluff their services with unnecessary fees can save you some money in the real estate process.
  5. Get the home inspected. A home inspection will let you know what problems, if any, exist with the home before you make any final and irreversible decisions. If the inspector finds a serious issue with the property now, you can ask the seller to fix the problems or back our completely.
  6. Check for pests. Separate from a home inspection, you will also need to make sure that the home does not have termites or other animals that will cause problems. If pests are found and not taken care of, the mortgage company will likely not allow you to close.
  7. Renegotiate the offer. If you have discovered any home or pest problems, you can renegotiate offer on the house to reflect the damages and repairs found in the inspection.
  8. Lock in an interest rate. Work with your lender to lock in a low insurance rate that you can live with depending on your credit, location, and loan type.
  9. Contingencies. These should be removed once you are satisfied with your interest rate, the repairs being made, and the results of the inspection.
  10. Pay escrow. This amount will vary depending on the remainder of the deposit, the amount of money originally put in, and the closing costs.
  11. Walkthrough. Make sure that the home is in the final condition it should be in before you finalize your purchase and nothing that you have paid for has been removed from the property.

Congratulations! Once all these steps are completed, you are ready to own your home. Sign the papers with the help of your real estate attorney, reading all fine print to ensure you are happy with the deal being offered to you and get ready to move in.

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