A sale is not a sale until the keys and finances are handed over at the closing. So, who exactly handles the closing?  After completing the negotiation and tour process, a realtor’s client understands that someone else (a third party) is involved in the closing. It can be confusing to try and understand the closing procedure. Before dealing with or becoming a real estate agent, read below for some worthwhile information on real estate closing.  A lot happens, and a lot of money will change hands, but it can become a smooth and hassle-free experience when you understand the expectations and plan. 

What Is the Closing in Real Estate?

So, before going into the closing details, let’s first see what closing means. Closing is the phase in property selling where money and documents are exchanged to ensure that ownership is legally transferred and money is paid out correctly. Yes, it’s an exciting moment; therefore, it’s necessary to involve someone carefully observing everything during the closing process. 

Closing is not just one day. Instead, it involves all the steps outlined in the sale contract from when the buyer accepts the offer until the date the seller gives the ownership to the buyer. 

What Are the Steps Involved in Closing a Home?

So, now you know what closing means. Let’s dive into it! It’s the big day when the home sale closes. What will happen legally and logistically? The closing process is an average of 50 days, but it could go longer for other reasons like determining the checklist of seller and buyer financing.

The significant steps involved in closing are:

Home Inspection: It’s not mandatory, but it’s suggested you take a tour of a home in person to ensure that it’s up to your requirements. A home inspection comes next after negotiation and then acceptance of the offer. It involves the analysis and observation of the home systems’ safety, quality, and functionality. 

If the seller knows of any issues, they must tell their agent about the home’s issues and the required repairs that were done, which are put in a Property Disclosure Document and made available to potential buyers. After inspection, the seller can fix things or take some money off their offer if things need to be fixed. Depending upon the contingencies mentioned in the sale contract, the buyer can ask the seller to remedy the significant repairs before closing. If the seller refuses, the buyer can cancel the contract.

Professional Lender Appraisal: Most buyers borrow money to purchase the property in the form of a mortgage. In this case, the mortgage lender arranges a professional appraisal so he can be confident that the amount he’s lending is in line with the home’s market value. This allows the lender to repossess and foreclose on the house in the future if the buyer stops paying their mortgage. 

Final Walk-Through:  It usually occurs 24 hours before closing to ensure that everything is in order and that they are confident with the state of the house right before closing. The buyer and the agent inspect all the required repairs and see if the property is clean, damage-free, and repaired. Also, they must check that all the possessions have been removed unless specific items are to stay. 

Finalize the sale: Ready, set, close! We have reached the final day and the final step of closing. You have made a final walk-through, transactions have been completed, arrangements have been made to move, and the only remaining phase is – THE CLOSING! You’ll sign a lot of papers. Don’t hesitate to ask the attorney about any document you don’t understand and use your right to know what you are signing. 

Where is the Closing Held?

Depending upon the escrow agent, the closing can happen at the office of any of the following parties:

Title Company: In some cases, the title company that verifies the legitimacy of the seller’s property ownership serves as an agent for a transaction and hosts the closing.

Escrow Company: Sometimes, an employee of the Escrow company can be responsible for safely holding the transaction funds and may conduct closing at his office given by the company. 

Real Estate Attorney: Some states require a real estate attorney to be present at the closing to prepare the specific documents or coordinate the whole process. 

Lender: Closing can also be held at a mortgage lender’s office financing the buyer. 

Usually, most of the closings happen at one of these places. However, the closing can happen anywhere as long as the appropriate parties and the attorney with legal documents and payouts are present.

Who Attends the Closing? 

Depending upon the regulations and venue for the closing, the characters that can be present may consist of some or all the followings:

The Buyers & Sellers: Buyers and sellers don’t close simultaneously. Usually, buyers close first. In this way, it becomes clear that financing has already gone through.

Buyer’s agent: It’s not mandatory for the buyer agent to attend the closing; they often do this to answer any originating questions about transactions and the agreed-upon amount.

Title company: The title company’s representative makes sure that the seller can legally sell the property to the buyer and transfer him the title.

Real estate attorney: Some sellers and buyers may ask legal representatives to review the paperwork.

Mortgage lender: Some lenders attend the closing, but most don’t.

Listing Agent: The listing agent may also attend the closings to provide moral support and assistance with last-minute questions.

What Does the Seller Bring On the Closing Day?

Sellers don’t need to bring much, just a Government ID card, Keys, outstanding documents, and papers that the real estate agent instructs them to bring. Also, the documents show clearly that you are done with all the repairs requested by the buyers.

Most Common Real Estate Cost

The closing process has become synonymous with several fees, and the cost ranges between one to seven percent of the property’s sale price that is split between both parties. Home sellers pay between 1-4% usually. It involves a few or all of the following:

• Mortgage Origination Fees
• Appraisal Fees 
• Title Insurance
• Real Estate Agent Fees
• Prepaid Costs
• Private Mortgage Insurance 
• Recording Fees & Taxes

Wrapping up – Summary

So, now you know the closing and how to walk through the whole process with peace of mind. However, the real estate closing can be intense and lengthy. The buyers and sellers should not feel they have to deal with this process alone. Both real estate closing attorneys and agents should be involved in the closing. They make sure that every step is completed correctly and on time. When you finally reach the closing date and hold the keys or money, you’ll forget all the hassle, and celebration is the next phase!

Allow Falaya.com to become your powerhouse through the closing procedure and the entire real estate sale process. Falaya offers the seller an accessible listing and consultants to assist them throughout the sale. Book an online tour with us to learn more!

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