The home buying process is inherently exciting, and it’s one of the most effective ways to build wealth for yourself. So, aside from having your own place, you’re also making the right financial decision for your future.
How can you expect the process to go, though? Is the real estate closing process just a matter of handing over the keys?
Not exactly. We’re going to talk a little bit about the home closing process in this article, giving you insight as to what you can expect and how to move forward.
Let’s get started:
Factors in The Real Estate Closing Process
The process of closing on a house is one that takes place over the span of weeks or months. Some of the things you do at the beginning, such as getting pre-approved for a mortgage, can impact how things go when you’re getting ready to close.
That said, it’s important to be comprehensive and prepared with your approach. The first thing to do is to get pre-approved for a loan.
Pre-approval helps make your searching process quicker, and it gives you some leverage and other benefits when it comes to getting a final price. Before you come to a conclusion on a home, it’s important to acquire some help.
Getting a Real Estate Agent
A real estate agent is crucial in the home-buying process. You can go through everything without one, but there’s a reason that they’re so commonly used.
Realtors can help you identify great deals, sniff out scams, and navigate the various steps of the process with you. If you have general questions, your realtor has a vested interest to answer them.
They’re paid on commission, so they need you to go through with the sale in order to get paid. They can help you get in touch with the professionals you need to go through with escrow, inspections, insurance, and more.
Escrow agents are typically attorneys. Their role is to hold onto the property while the specifics of the deal are being fleshed out.
In other words, they’re a middleman that ensures that the specifics of your agreement are carried out faithfully. That means that you won’t be ripped off or financially damaged by a dishonest seller.
In some cases, these people are also called title agents. They’re also charged with examining the property to ensure that all of the specifics of the deal are carried out in earnest. Once all of the requirements of the deal are carried out, the title agent will transfer the home into your name.
Things to Take Care of
There are a number of things that you have the responsibility to do before the home is in your name. It’s also in your best interest to take care of the following things so that you know you’re making a good investment.
First, you should have the home inspected by a professional. This helps you identify any red flags that might deter you from purchasing the home. Damaged components of the home that may require repairs in the near future can be easily overlooked in the buying process.
Using a trained eye to pinpoint things to watch out for is essential. Your lender will also require that you have the home appraised. This is the process of looking at the home to assess its financial value.
Appraisals ensure that the lender doesn’t loan you too much money. It’s also a great way to tell that the price you’re paying is on par with the market value of the home. Sellers will typically have an appraisal as well, but there’s no telling whether that appraisal was accurate.
Having one done on your own terms can save you a lot of money, and you’re probably required to have one done anyway.
Finalizing Loan Paperwork
Make sure that you’re in close contact with your lender throughout this process. Keep them informed about inspections, appraisals, and the timeline of the home buying process.
You’ll be required to offer them a lot of information and to fill out various pieces of paperwork throughout the process. This can take a long or short time, but things will go much more smoothly if you’re pre-approved.
Additionally, the general state of your financial life will impact the loan process. Things like assets, child support, income, bank statements, insurance paperwork, and more may need to be used throughout the process.
If you’re starting the purchasing process now, it would be wise to gather up all of the financial information you can now. If you don’t have a form or two, it might take different agencies a few weeks to give them to you. There’s nothing worse than a delayed house closing.
That’s time that could hold up the lending process.
Get Homeowner’s Insurance
You’ll probably be required by your lender to get homeowner’s insurance. Those payments are often wrapped into the price of your mortgage, especially if it’s a requirement given by your lender.
Even if you aren’t required to get this insurance, it’s an excellent idea to have it in place before you set foot in the house. Things happen, especially in new houses.
You might find that there was something that got missed in the inspection and wasn’t listed in the sale. Further, areas that prone to natural disasters are hotbeds for extreme home damage that has to be covered by insurance.
Basically, you hope that you’ll never need to use it. The monthly price, though, is in exchange for the peace of mind that you and your family won’t be financially ruined if anything were to happen to your home.
Once you’ve gone through everything described above, you should do a final walkthrough with your agent. This is just a measure to check that the previous owner is moved out, the home is in the same condition, and there aren’t anythings that were missed.
Then, you’re good to close the deal!
Want to Learn More about Homeownership?
Hopefully, the real estate closing process listed above was helpful to you as you get started with purchasing a home. Closing on a house is much easier when you know what to expect and you have professionals to help you along the way.
If you’re still looking for more information, we’re here to help. Explore our site for more insight into homeownership, the home selling process, and more.