The closing process on a home purchase can be overwhelming and stressful. This is especially true for first-time home buyers. During the closing process it is important to check off all the necessary steps in the correct order. When you work with an experienced real estate agent and knowledgeable escrow officer, they will guide you through the process. To help ensure a smooth closing, in this blog we share six tips to successfully close a home purchase.
1. Ensure a clear title
To take title means to claim legal ownership of the property or home you are purchasing. This process is confirmed by local public land records by the title company representing the buyer in the transaction. To protect from legal claims, we recommend the buyer purchase title insurance. Learn more about title insurance here.
2. Square away contingencies
Most home purchase agreements have contingencies, or items that buyers must complete before the real estate transaction is approved. The most common contingencies are home inspection, appraisal, and financing. Before moving forward in the closing process, all contingencies must be addressed and removed.
3. Final mortgage approval
A home buyer must pay a down payment, which is a percentage of the agreed upon purchase price. The balance of the purchase price is typically paid with a secured loan or mortgage. It must go through the underwriting process by a certified underwriter who is employed by the mortgage company. They will review the home appraisal, check credit score, and ensure finances haven’t changed since loan application.
4. Review and approve closing disclosures
If a buyer secures a loan to purchase the home, a thorough review of the closing disclosure statement is imperative. It informs the buyer and outlines specifics on the mortgage payments, fees, closing costs and the loan terms, including the duration of the loan and the interest rate. If something appears incorrect or the buyer has questions, this is when to address it for clarity and understanding. No one wants to be surprised.
5. Conduct final pre-closing walkthrough
The buyer is entitled to a final pre-close walkthrough within 24 hours of an official closing. While buyers may have seen the home multiple times at this point, don’t skip out on this step. A last walkthrough allows buyers to check that the previous owner completely vacated the property as outlined in the contract. It also provides an opportunity to go through the house and double check the overall condition of the property and nothing changed since the last walkthrough. If there are any issues or if the seller failed to fix something per the agreement, it can be addressed prior to closing.
6. Bring all documentation to official closing
Coming prepared for the official closing day is essential to making sure it goes smoothly. Plan to sign a lot of paperwork and be sure to bring the following documents:
- A government-issued photo ID
- Proof of homeowners insurance
- Original or copy of your contract with the seller
- All home inspection reports
- Any loan paperwork
- Certified funds or proof of wire transfer
- Any additional documents requested by the lender
When an offer is accepted and you are ready to enter escrow, Landmark Title can take care of all your title and escrow needs. Contact us to have a knowledgeable member of our team answer any questions about the closing process.