Buying a home is a significant milestone that brings a lot of bliss in life. After all, who doesn’t want to live in a house that they own?
If you’ve chosen the house, made an offer, and are inching towards the closing on the home, that is great. However, that doesn’t mean it is time to relax.
Naturally, becoming a homeowner is both exciting and overwhelming. The stakes are high, but there is something you can do about it. You can prepare yourself for the transaction. The closing of the house matters, and it must not be taken lightly.
Even if you are thinking to opt for real estate closing services, knowing the ins and outs of the closing process is vital. To finalize a real estate transaction and formally transfer the ownership to the buyer, the closing must occur. Knowing what to expect and being informed about the closing will keep you confident throughout the process.
Since a home is a significant investment, buyers should be wary. A seller might not want you to know about some new developments on the property. Or maybe you need to prepare a document that will take some time. Therefore, knowing the right questions to ask before closing on a house is essential. The answers will clarify your responsibilities and protect your rights.
Here are some questions that you should consider asking.
Have there been any issues with the home recently?
A seller is legally obligated to disclose information about the property to the buyer before the closing. Imagine how frustrated you would be to find out some hidden issues with the property after finalizing the deal. The seller could even be hiding something serious.
Buyers should ask about the status of the property to the seller themselves or through a legal representative. Perhaps there is some damage from a flood or an earthquake. Moreover, being informed is your legal right. Having accurate knowledge about your property will ensure that you do not get fooled. You might even want to utilize the services of a home inspector to avoid any risk.
What parties are involved in the closing process?
According to the US Census Bureau, an estimated 635,000 houses were sold for a median price of $312,800 in 2018. While countless people make offers on homes only a few reach the closing process.
All parties to the contract are involved in the closing process and should attend the closing. These parties include the buyer, the seller, a real estate attorney, and a real estate agent. However, it is not necessary to involve an agent. On the other hand, some states legally require a real estate attorney to be involved in the closing process. So the attorney handles everything between preparing property documents and the closing.
Some third parties also attend the closing to facilitate the transaction. These parties could include a home inspector or a title insurance agent. You should discuss who needs to be present at the closing with the agent or the attorney.
What documents are needed for a home closing?
A home closing has some technical requirements that must be fulfilled. Ask your agent or real estate attorney to inform you about the documents you must bring. These could include proof of homeowner’s insurance, pest inspection certificate, documentary stamps, and photo identification. Since these documents take time to prepare and may require professional assistance, take them seriously.
Make a checklist and ensure that you have everything that you need for a hassle-free closing. After all, you wouldn’t want a little carelessness to cause a delay. On the day of the closing, bring all the necessary documents, and you will be good to go.
How much will the closing of a house cost you?
You will receive a closing disclosure at least three business days before the closing. This document will enlist all closing costs and details of payments. The details will help you understand who pays what to whom. Third parties involved in the closing process charge you for their services. These charges include home inspection bills, appraisal fees, and attorney fees. On average, these costs equal to 3 to 4 percent of the property’s purchase price.
Buying a house is a costly affair, and there might be many unanticipated costs. You should always have some provisions to aid you and secure the transaction.
If you’re taking a loan for the house, you should make sure you can afford to pay the monthly mortgage. It is not unheard of for the mortgage amount to change near the closing. If this happens to you, ask the lender to explain the reasons. Be careful about cash flows to ensure your peace of mind.
How much time will it take for the process to complete?
You must be excited about owning a home. The homeownership rate in the US was 64.8 percent in 2018. It usually takes a few weeks after the offer is accepted for a house deal to close. Even though the buyer and the seller typically agree on a closing date, there might be adjustments to the timeline.
Third parties may require some time to execute their end of the deal. The entire closing process is technical and can even take a few months to be completed. Be patient through this journey to finally become a homeowner.
The closing is the last step of a real estate transaction. If you have a formally accepted offer and are on your way to become a homeowner, you should be wary. Having access to information about the property, the closing process, and the costs is essential. You do not want to make a mistake that costs you your investment or leads you to a bad situation. Fulfill all requirements, and the ownership will be transferred. The process may take weeks so be patient.