A closing is the final step of the real estate transaction in which the loan and title documents are signed between the buyer and seller and their respective representation.
It may sound simple, but a closing is a very complex process. At the end of a real estate transaction, several loose ends need to be tied up, which is why it is important to have a real estate agent to make sure everything is executed properly.
A closing usually has three parts:
- Step 1: The buyers review and sign all of the loan documents.
- Step 2: The buyers, sellers, and title company exchange and sign the documents regarding the transfer of ownership, and other documents pertaining to the contract such as termite inspection and prorating the taxes.
- Step 3: The money exchanges hands and the property is officially "sold".
Both the buyer and seller need to prepare themselves for the closing prior to the event. Sometimes, unexpected problems may arise at the closing. For example, if you are purchasing a new home, the land itself has been owned and transferred for generations. A mistake might have been made thirty years ago at the town clerk's office which could result in a negative surprise for you and the lender. This is why it is important to do your research and know all there is to know about the property before the closing. As a buyer, you need to make sure the seller has the legal right to sell the property, and has a seller you need to make sure the buyer's check is good.
Every transaction is different which means that each closing will differ from the next. Your real estate agent will keep you up to date and keep you informed about what will happen at the closing.
Questions? Contact us today!