What You Need to Know About the Closing of a Home
Finally, you’re done with all the overwhelming parts of the home buying process, what’s next? Well, the only thing preventing you from moving into your new home is the closing. If this is your first time buying a home, you are probably wondering what the closing is and what exactly it entails. So, to help you prepare for this anticipated day, let’s take a look at what happens at the closing of a home:
What Is the Closing of a Property?
Also known as settlement, a closing is typically the final step in the home buying process. It entails reviewing and signing relevant documents by the buyer and seller before property ownership gets transferred. The entire process is managed by a third-party agent, such as a real estate attorney or escrow agent.
Who’s Present at the Closing?
Before we delve into the details of the real estate closing process, let’s first look at the parties involved in the event. While closing procedures can vary depending on the state or even country, you may expect the following parties to be present at the closing meeting:
- Closing agent, who might be the escrow agent or from the title company
- Attorneys: One representing you and the other for the lender
- A representative of the title company
- The home seller
- The buyer
- The seller’s real estate agent
- The lender also referred to as the mortgagee
The closing agent is usually responsible for conducting the closing meeting by ensuring all documents are signed and recorded and that closing fees and escrow payments are paid and properly distributed.
What Happens at the Closing?
In the simplest form, during the closing, the homeowner or seller transfers the property title and ownership to you. As the buyer, you’ll be required to sign several legal documents necessary for the transfer of property ownership. Expect to also cover the closing costs and escrow payment for your homeowner’s insurance and property taxes. The escrow agent will handle the distribution of agent commissions and other funds.
Here’s a summary of what happens at the closing:
- As a buyer, you’ll provide a cashier’s check to pay the remaining closing costs and fees.
- Both you and the homeowner will sign the property title, thus transferring ownership to you.
- The closing agent will register the new title, where you’ll get listed as the official owner of the home.
- All the realtors who take part in the transaction will be paid their agent commissions.
- After you’ve cleared the closing costs and the seller’s mortgage balances, they will receive any proceeds they earned from the sale.
Typically, real estate transactions involve a lot of paperwork, from legal disclosures to mortgage-related documents and tax records. In the closing process, the closing agent has all the required documents for you to sign upon arrival.
As the property buyer, some of the documents you will likely have to sign at closing include:
- Property deed
- Bill of sale
- Transfer tax declaration
- Mortgage agreement and note
- Closing Disclosure
Once you’re done reviewing and signing all the closing documents and the funds have been distributed, the property deed is transferred to your name. The seller hands over the keys, and you become the legal owner of the home. If the closing is finalized on different dates, then the seller’s realtor might be the one to deliver the keys to your new home.
You can decide to move in immediately or later after the closing, depending on the agreement you’ve made with the seller.
Are you’re looking for an attorney to help you ensure that all goes well from the start to the end of the closing process? Contact us today and we’ll provide you with the necessary legal support you need for a seamless and smooth home closing process.