What is the Closing Process in Real Estate?
It can be exciting to hear you have a closing date when investing in a piece of real estate. After all, this means you are seeing the light at the end of the tunnel and will soon have your new keys in hand. Except, the closing isn’t just a meeting. Rather, it is a process that takes, on average, 30 to 45 days.
There are quite a few people involved in the different steps that need to be taken in order to successfully make it through the closing. Here’s everything you need to know about the closing process in real estate so that you have an idea of what to expect.
Opening an Escrow Account
When you give an offer on the property, you typically put down a good-faith deposit (sometimes referred to as earnest money). A sales contract is signed and the seller pulls the listing for the property.
Instead of taking the risk and giving your deposit directly to the seller, it is customary to open an escrow account with your title company. This money will remain there until the sale is finalized and will then be transferred to the seller.
Title Search and Title Insurance
A title search is done to protect you. It is a deep dive into the property’s history that will confirm whether or not the title is clear from any judgments, liens, outstanding taxes, encroachments, and the like. It will also confirm that the seller has the right to sell the property in the first place.
Once the title search is complete, the title company will provide you with a title commitment that states the findings from the search and whether or not there are any conditions that need to be met before the title insurance policy can be issued.
This part of the process really gives the buyer peace of mind before moving forward with the closing process.
Closing Documents and Closing Costs
The next step involves getting the closing documents together. There are several different documents that need to be generated, reviewed, and organized, such as the promissory note, those involving your mortgage, the new deed, and so forth. In order for the transaction to go off without a hitch, these documents need to be correct – and signed properly, too.
Closing costs are also discussed around this time which often include things like loan origination fees, appraisal fees, title search fees, title insurance premiums, surveys, taxes, recording fees, commissions, etc. Discuss your closing costs with your title agent so you know exactly what you will be responsible for.
Once all of the above is handled, you will have your closing. This may be done at the title company’s office, in a location that is most convenient for you, or even remotely. During this time all those documents that were organized in the previous step are signed and notarized. Don’t be surprised to see the seller, the title agent, or the real estate agent at the closing.
After the signing, the agent handling your escrow account will begin disbursing monies as directed, such as to the seller, fees to realtors, the title company, lenders, and more. These transactions are safe and secure so that there are no unexpected issues.
Document Recording – and Preparing Title Insurance Policies
In order to be official, the documents you signed at closing will need to be recorded in the county where the property is located. Title insurance policies will also be issued and sent out to you, as well as the lender
These are the last steps in the closing process.
Hassle-Free Closings at FIT Agency
If you are investing in real estate and need a title company you can trust, then contact the title experts at FIT Agency today at 732-630-0900.
Our goal is to treat you with personalized service by getting to know your goals and helping you to achieve success. We’ll partner with you to provide fast and accurate title and settlement services. By continuously analyzing our processes and integrating the newest technologies, we streamline our processes so you get faster turnaround times to meet your important deadlines. Start building a professional relationship with us today. Send an inquiry now.
SEND inquiry NOW
Get expert advice
FIT Agency © 2024. All Rights Reserved