Real estate can be complicated, especially if you’re new to the game. There’s a lot that goes in to buying or selling a home—numbers, data, and lots of paperwork! And one of the most mysterious parts of the whole transaction to many buyers and sellers is closing day itself. So, what happens at closing anyway?
Here’s your complete guide to the real estate closing process.
The Closing Process for Buyers
Congratulations—you’ve got a signed contract with a seller and you’re entering the closing process of a new home! But what should you actually expect from that final step of the buying process, the close?
The Closing Date
The Purchase and Sale Agreement you signed with the seller details specifics of the home sale, like the price of the home you’re buying, as well as the date and location of the actual property transfer. But before this official Closing Day, there are a couple of steps to get through.
Home Inspection & Reviews
Typically, after you and the seller agree on a price and other terms for your home, you’ll schedule a property inspection, home appraisal, and possibly a property survey. During this time, you’ll learn about any potential maintenance or structural issues to the home you’re about to buy (the home inspection), as well as its estimated market value (the appraisal).
Review these reports with your agent to determine whether you A. still want to purchase the home and B. want to request repairs or price reductions from the seller.
Signing Lots of Paperwork
Once you and the seller agree to move ahead with the sale, there’s going to be quite a bit of paperwork for you to sign. You’ll work pretty closely with your mortgage lender at this time, as well as possibly an attorney, to get your mortgage finalized. You’ll also need to sign a deed of trust, which is a security measure for the lender that gives them the right to sell your home if you cannot repay your mortgage.
Paying Closing Costs
Finally; it’s closing day! During this time, you and your agent will sit down with your lender, attorney, and the seller’s representatives to finish up the paperwork to officially transfer the title of your new home from the seller to you. Before you get your keys, however, you’ll have to pay some closing costs in “guaranteed funds” (such as wired funds or a cashier’s check). Your lender or attorney will let you know ahead of time what you’ll need to pay.
Once you hand over that check, you get your keys and it’s time to start moving!
The Closing Process for Sellers
You’ve just accepted a buyer’s offer to purchase your Erie property—congratulations! But… what happens between that signed Purchase and Sale and the day you actually hand over the keys? Here’s what to expect from the closing process from a seller’s point of view.
Reviewing Terms & Conditions
Selling a home usually rests on a series of terms and conditions, such as a buyer being able to obtain financing (which is why preapproved buyers are so appealing). A home inspection is also usually included in the sale agreement as a way for the buyer to ensure they’re not about to purchase a home with serious maintenance issues. Lenders will likely also have some specific criteria for your home—like a title exam, title insurance, and an appraisal.
Home Inspection & Repairs
After the home inspection, the buyer will receive a detailed report about your home, including any current or potential future maintenance issues. At this point, the buyer will decide if they still want to buy your home or if they want to request that you make any repairs.
A buyer can make any requests—from a simple repaint to a full HVAC or roof replacement—but you have the right to refuse. Just be aware that refusal to complete repairs does enable the buyer to walk away from the sale. Any agreed-upon repairs must be completed before the closing date.
Final Contract Reviews
Hopefully, you’ve got a great closing agent who can take care of this for you! At this point, it’s your agent’s job to review the sale agreement to determine what payments or credits you’ll receive, what amounts are due from the buyer, and that all transaction costs are paid—like taxes and title searches.
Financial Adjustments
Based on their contract reviews, your closing agent will ensure any necessary financial adjustments are made, including compensation for prepaid property taxes, heating costs, and more. You’ll also find out exactly what the buyer will be paying you, and what you’ll be paying, too.
It’s Time to Move!
Buying or selling, after the closing process is complete, it’s time to get moving! Need to know what to pack and which moving expense records to keep? Want to know more about closing or the real estate process? Our comprehensive buying and selling guides tell you everything you need to know about buying, selling, moving, and investing in Erie, PA!
Still have questions about what to expect at the close? Contact Marsha Marsh Real Estate Services today—we’d love to help!