Closing Costs and the Closing Process - An Overview

Posted by  on Apr 02, 2010
 

While the closing process of buying a home sounds intimidating, it can actually be a smoother ride than choosing the house itself. When you break the process down into three simple parts, as well as, the costs, you will begin to see what your responsibilities are — whether you are the seller or the buyer. By taking the time to learn more about this process, you will begin to see what you can do to expedite the process and make it easier for everyone involved.

Pre-closing is the initial stage of closing a home and is that period before you actually take ownership of the home or you have actually sold the home. You are waiting for a response from the seller about your bid or you are awaiting the bid from the buyer. This is an anxious time in which you are not sure if the transaction is going to go through, so why not use your energy to begin to put the energy in motion for an eventual positive outcome? You can start by arranging the inspection of the home, as well as, the appraisal of the home to make sure that everything is in order. Whether you are a buyer or a seller, you will need to know that the house is safe and sound, as well as, worth the money that you are selling it or buying it for. Many banks will only want to lend you as much money, if not less than the home is worth. Therefore, the appraisal comes in handy when you start asking for loans.

This stage will also be a good point to purchase homeowner's insurance and title insurance to help protect everyone in the transfer of ownership, as well as, the home itself when you become the owner.

The exciting moment when you are actually closing on a home is when you need to be the most careful during the closing process. You will want to have plenty of expert support during this part of the transaction, including your real estate attorney, the seller's real estate attorney, the real estate agent for both the buyer and the seller, a mortgage loan officer and the closing agent, generally the attorney for the buyer and the seller. During this time, these professionals will be going over the paperwork needed to actually transfer the title from one party to the other as well as be making sure that all the money that is necessary for the process is paid at the time.

What many people don't realize is that closing can be a long process, depending on the complexity of the transfer. It can also be completed over long distances via phone, fax, and email in many cases. You will also be figuring out what costs you will be covering as the exchange of the home takes place. This includes utilities and other costs that are incurred as the tenants move out and you move in.

You will then begin the process of signing all the documents to make the transaction legal such as:


  • Mortgage note
  • Mortgage
  • Closing statement
  • Buyer's funding check


There may also be other papers you will need to sign, depending on the specifics of the purchase.

You might run into some problems at closing, but these can be easily avoided and remedied by having lawyers present at all times of the process.

Once the title has been officially transferred to the buyer, they are then the owners of the home and responsible for anything that might occur from that point forward. But at that point, they're also homeowners!

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