What is a closing & and when does the closing process start?
A real estate closing is the final step in the real estate buying and selling process. Once an offer on a property is officially accepted by the seller, a purchase agreement is made, and a closing date is set. Upon closing, the property ownership is formally transferred from the seller to the buyer, after which the buyer is free to start their move-in or renovation process. Your agent, lender, and title agency will work together to complete their end of the deal. This means that their timeline might vary from the buyer and seller’s agreed-upon closing date.
The closing process in real estate starts when the buyer and seller agree on the terms and sign a purchase agreement.
Here's a simple explanation of the steps:
- Agreement: Both parties agree on buying and selling terms, and they sign a contract called a purchase agreement.
- Money in Escrow: The buyer submits some money (earnest money) to show their commitment. It's held by a third party (an escrow agent) until closing.
- Inspections: The buyer checks the property, and if there are issues, they talk with the seller about fixing them. (This step is optional and may differ on every transaction)
- Title Check: They make sure the property's title is clear, and the buyer often gets insurance to protect against any title problems.
- Loan Approval: If the buyer is getting a loan, the lender checks everything and approves the loan.
- Final Check: The buyer looks at the property one last time to make sure it's okay.
- Closing Day: Both parties meet to sign papers. The buyer pays the remaining money, and the seller gets the sale money.
- Recording: The paperwork is officially recorded, and ownership is transferred. The buyer can now move in.
These steps might differ based on local rules, but that's the basic idea of how a real estate closing works.
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