The Final Steps to Closing
When the offer is accepted, there are a number of steps that must be taken before closing.
- A purchase agreement is signed. To protect yourself, this agreement should be conditional which means it can be cancelled if you do not secure a loan or problems arise during the inspection that cannot be corrected before the closing. Because this agreement is a legal binding contract, you may want to consult with a real estate atorney.
- The home is appraised. The appraiser will visit the home, review recent prices of similar homes in the area and do an evaluation of the property’s value.
- The title is searched. The title search is preformed by a title company in order to uncover any possible problems with the title to the property, ie: property size, legal ownership, the way it can be used. Title insurance, which guarantees the property you buy is as stated, will be issued if no problems are found during the title search.
- Purchase homeowners insurance. Most lenders will require you to have homeowners insurance before you can close on the property. Homeowners insurance will protect you against fire, theft & liability.
- Hire a home inspector to inspect the property. A home inspector will carefully examine the inside and outside of the home and provide you with a written report on:
- Electrical, plumbing, heating & cooling systems
- Exterior condition including: roof, chimney, structure, garage and check for possible water damage.
- Interior condition including: Foundation, structure, insulation, windows, doors...
- Ask about termite inspection (pest control).
If problems do come up during the inspection, oftentimes the seller will help with any repairs.
- The role of the attorney - If you hire an attorney, make sure they have extensive knowledge of the local real estate laws. They can help with your agreements, take care of the title search and title insurance and draw up all necessary paperwork. Their job is to make sure the terms of the agreement have been met so the proerty can close on time.
- Before closing checklist
Review all loan documents and agreements including the “good faith estimate” of all your
closing costs.
Do a final walk thru to make sure all repairs have been made and there are no items in
the agreement that have been changed or removed from the house.
- Closing time - Once each step has been successfully taken, you will schedule a time
to close on your home. This is when the remainder of the closing costs and downpayment
are paid, papers change hands and the home officially becomes yours.
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