Date Posted: 2012-07-03 02:37:59
Site Posted: Myproperty.ph
The closing is the final step in a real estate deal. Also called the settlement or close of escrow, this is the point where the buyer and the seller have agreed on the price of the property and the terms of the contract. Here are the things that a buyer or a seller should expect when they reach the final point of their transaction.
The closing is held in an official location where the sale can be recorded, and calls for the presence of the buyer and the seller, as well as their respective lawyers and real estate professionals. The first step is opening an escrow account, which is where all the money and legal documents will be held prior to the completion of the deal. A title officer then searches for any claims on the property to make sure that there will be no ownership problems later on.
The buyer and seller discuss the fees that they need to pay the escrow companies. Be careful when you get to this stage because if you are inexperienced in real estate, these companies might try to get you to pay various “junk fees” like administrative fees, application review fees and even email fees. (If you want these fees removed or at least lowered, you have to speak up about them.)
Having the house or whatever property is being purchased inspected for damage and pest infestation is the next step, as the results of these inspections will tell if you need to renegotiate the price of the property. Should there be any problems with the property and the seller refuses to lower the price or make the necessary repairs, the buyer still has the option to back out of the deal.
The next step is for the buyer to lock his interest rate to an amount that he will be able to afford based on the present real estate market conditions (Bear in mind that rates can also be affected by factors like the type of loan and the borrower’s credit score). The buyer must also agree to remove any contingencies stipulated in the contract before the deal can be closed.
When the buyer signs the purchase or lease agreement, he also pays a certain deposit to assure the seller that he is serious about buying the property, and to make sure that the property is taken off the market. This deposit is either returned to the buyer if the seller opts out, or serves as compensation for the seller should the buyer chooses not to buy. If the deal pushes through, the buyer needs to add more money to this amount to cover the down payment and the closing costs.
After checking the property a final time for any damages that may have occurred during closing, as well as to confirm that all the amenities included in the deal are there, the buyer then signs the necessary documents. The buyer should be thorough in reading the paperwork, particularly the fine print, to make sure that you won’t be unknowingly signing something that will require you to pay more than you should later on, such as prepayment penalties and higher interest rates.
Jillian Cariola, Writer
(cover image by William Berry)
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