Technically, the ‘closing’ of a deal occurs when you sign the papers that make the property yours. But before that happens, there are a few things you need to know. A little working knowledge of how real estate transactions work can go a long way.
1. Walk around the property
Better safe than sorry! Inspect the house one more time to make sure it is in proper condition as agreed upon by all parties. During the tour, make sure that all the conditions required by the agreement, such as appliances and furniture, have been met.
2. Secure the required insurance policies
To obtain a mortgage, most lenders require the buyer to purchase a homeowners insurance policy. A homeowner’s insurance policy protects both the buyer and the lender, should something happen to the home in the future.
3. Open an escrow account
An escrow account is an account held by a third party on behalf of both parties to a transaction. This makes things easier and more convenient, as many activities are required to complete a home sale. In addition, an escrow account is the best way to prevent the seller or the buyer from committing any type of fraud, since the money and related documents are with a neutral third party.
4. Lock in your interest rates
Since interest rates are unpredictable and fluctuate several times a day, you should monitor interest rates and lock them in if you haven’t already. Keep an eye on the market and lock in your interest when rates are lowest and most affordable.
5. Conduct pest inspection
A pest inspection involves a specialist making sure your home is free of wood-destroying insects, like termites or carpenter ants. Even a small termite problem can spread and destroy the entire house. Therefore, treat any minor pest problems immediately, if they exist.
6. Get title insurance
A title insurance policy is a policy that protects the buyer and the lender when there are problems with the land after the sale closes. While you’re getting a title insurance policy, learn which policy offers the best protection for the least amount of money.
7. Consult an attorney
It is difficult to create legal documents and confirm the laws related to the real estate market. Hiring an experienced attorney will make things easier and help you with the closing papers.
8. Renegotiate your offer
If your inspection reveals defects or flaws in the property, you may want to reconsider the offer to reflect the cost of any repairs you may need to make.
9. Finalize your finances
Before you close, get all of your finances in order and make sure you have the money you need to pay for closing costs and a down payment.
10. Schedule and attend the closing
Sign the imposing paperwork and make sure both parties are present for the closing. Also, make sure the interest rate on the paper is correct and that there is no prepayment penalty. If you have retained an attorney, then he/she must be on-site with you to ensure that all paperwork is completed successfully.
Closing a real estate deal can be a tedious task, but once the deal is done, you can breathe a sigh of relief. If you are ever unsure of what you are doing, consult a real estate expert or attorney for help.