Buying or selling a home is an exciting experience. But like any major purchase or transaction, there’s also a lot of paperwork involved. The real estate closing process is the final step in buying or selling a home and can be overwhelming for new homeowners, buyers, sellers, and realtors alike. It’s important to understand what happens during the closing process and what you need to do to prepare for it.
The Real Estate Closing Process Explained
The real estate closing process is typically conducted by a third party such as an attorney or title company. During the closing process, all parties involved must sign documents that transfer ownership from seller to buyer and provide loan information from lender to buyer. Once all documents have been signed and notarized, the title company will record them with the local recording office in order to officially close the transaction. Here’s a look at some of the key steps involved in this process:
Buyer provides earnest money deposit
Before signing any documents at closing, buyers are typically required to provide an earnest money deposit (EMD). This deposit is usually 1-3% of the total purchase price of the home and acts as a form of good faith on behalf of the buyer that they will follow through with their purchase agreement.
Seller signs deed
At closing, sellers must sign over ownership rights using a deed document. This document transfers ownership from one party (the seller) to another (the buyer) once all parties have signed off on it. The deed should include details about both parties as well as information about the property itself so that it can be properly recorded with local authorities after closing has taken place.
Final walkthrough inspection
Before closing takes place, buyers should conduct one last walkthrough inspection of their new home just to make sure everything is in order before taking possession of it. This final inspection should include checking for any potential damages or problems that may have arisen since their initial offer was accepted by the seller - especially if there’s been a period of time between contract signing and closing day when no one has occupied the property yet.
Loan documents are signed
Buyers who are financing their purchase through a mortgage lender must also sign loan documents at closing in order to receive funding from their lender. These documents should outline all terms related to repayment such as interest rate, loan duration, payment amounts, etc., so that borrowers know exactly what they are getting into before signing anything.
Transfer of funds/keys take place
Once all documents have been signed by both buyer and seller (as well as lender if applicable), transfer of funds/keys will take place at closing when both parties are present for final confirmation that everything has been agreed upon according to terms outlined in contract agreement prior - including payment amount(s). After this point - assuming everything goes according to plan - ownership rights officially transfer from seller's name into buyer's name on paper.
The real estate closing process requires everyone involved—buyers, sellers, lenders—to understand what paperwork needs completing before transferring ownership rights from seller's name into buyer's name on paper. It’s important for all parties involved in buying or selling a home understand each step thoroughly so that no mistakes are made throughout this complicated process. Doing your research ahead of time can help ensure everything goes smoothly when it comes time for you to sign those papers at your own real estate closing.
For more information on selling a home or if you have decided its your time to sell your home, please reach out to us at (312) 803-1755 or online.
