Closing On Your Home:
The Step-By-Step Process
What does “closing” mean? Basically it is a term that refers to the point in which the title to the property is transferred to the buyer. Buying a home is an exciting and life changing event. Having a strong understanding of the process is critical. Here is a step-by-step list of everything you need to know about closing on your home.
1. If you are obtaining a loan to purchase the property the lender has three days from the time you submit your loan application to furnish you with a Good Faith Estimate or your loan costs. Within those three days you should receive a pamphlet that outlines the settlement process. If you do not receive this than talk to your lender.
2. Once the seller accepts your offer, then the countdown to the closing process begins. You can shop around for a settlement agent (attorney, title company, escrow company) to prepare all the documents for your closing. Once a settlement agent is selected they will handle the process from there. If you have given the seller or Realtor an earnest money deposit the settlement agent will insure that it gets promptly deposited into an escrow account where it will remain until closing.
3. The settlement agent will then request a preliminary title report. The title company will then search the public records for information pertaining to your home’s title. They will look for any title discrepancies that will need to be resolved before the property can be transferred to new ownership. For instance, any property back taxes, lien, outstanding mortgage, etc. that have been placed on the home. Title professionals work hard to resolve any of these types of issues before closing. If the sales contract mandates a prior mortgage to be paid off, the settlement agent will demand payoff amounts from the existing lender. The settlement agent may also order home inspections, termite reports, and surveys.
4. Finally, the settlement agent prepares the HUD-1 Settlement Statement which is a breakdown of all the costs for both seller and buyer. Once all closing documents are signed by bothe parties, the property is then transferred from seller to buyer. Congratulations! The house belongs to you!
TIP: Keep in mind that there are still further processes that the settlement agent must do after closing. For instance, forwarding payment to any prior lender, pay all parties for services rendered, paying out any net funds to the seller, and order a final title search of your new home before finally recording all documents to legally complete your purchase. But you don’t have to be involved in that process.
Reference: MSN Real Estate/Investopedia
If you or someone you know is interested in buying or selling
a Nashville Home please contact:
The Lipman Group | Sotheby’s International Realty
Office: (615) 463-3333 / Cell: (615) 509-1753