Are you preparing to close on your new home? If you’re ready for closing, you’ve already come a long way. You’ve managed to find a home that’s a fit for your needs. You’ve saved up enough money to cover the down payment. You’ve been pre-approved for a mortgage. Your offer has been accepted. Maybe you’re already thinking about how you’re going to decorate your new place.
Back up and slow down. There are a few steps you’ll need to go through before you close on your new home, like the closing process. Thankfully, if you have a clearer picture of what to expect, and if you work alongside your lender, you can make sure this process is as smooth as it possibly can be.
What Does The Closing Process Entail?
In the world of real estate, the closing phase is when a property is officially transferred from one party to another. This process happens after a seller accepts an office from the buyer. During negotiations, both parties agree on a closing date. Typically, it takes place a few weeks after the signing of a purchase agreement.
The Steps Of The Closing Process
There are several steps to the closing process. Documents are designed, money is transferred from the buyer to the seller, and the buyer receives the title for the property they purchased. Either a closing agent or escrow will be available to handle money transfers and prepare the documents that must be signed.
Step One: The Signing Of Documents
Most of the closing process will involve signing various legal documents. Before you sign these documents, you’ll want to read them from start to finish. If you have a question about something, make sure you speak up. Remember, this document is legally binding. The seller will also be signing documents during closing, though you’ll have more paperwork to get through then they will. The seller will be transferring ownership of their home over to you.
Step Two: Exchange Of Money
In most cases, you’ll be expected to bring a cashier’s check with you when you close on a home. This check will be presented to the closing agent and will generally cover the down payment and closing costs. You may be able to wire the funds over if you don’t want to bring a check.
The closing agent will also receive money from your lender. The agent must use these funds to cover the commissions for the realtors. If the seller has an outstanding mortgage balance, funds will also be used to pay that off. After those costs have been taken care of, the seller will receive the funds that are still remaining. The seller won’t be able to access these funds until after closing is complete.
Step Three: The Transfer of Ownership
The seller will have to sign the deed for your home. Once that’s taken care of, it will be registered with either your county or city. The deed needs to be on public record to prove that you now legally own this property. After everything has been confirmed, you will receive the keys to your new property. From there, you’ll be able to move in unless your contract states that the move-in will take place at a later date.
How Long Can You Expect The Closing Process To Take?
A report from Ellie Mae states that the national average closing time for a home is 47 days. With that said, there are a lot of factors that can influence the time it takes before closing is completed. Why does closing take such a long time? In many cases, issues crop up that cause the process to be delayed.