The closing process is the final step to buying a house. This is when the home purchase is funded through a lender, the deed is transferred, and you become the legal owner of the property. The steps leading up to closing are just as important as closing itself.
What Are the Steps to Closing on a House?
The steps to closing on a house are as follows:
- The buyer makes an offer on the property.
- The seller accepts the offer and both parties sign a purchase agreement.
- The buyer secures financing from a lender.
- The parties schedule a closing date and time.
The Closing Process From Start to Finish
The first step is getting pre-approved for a mortgage. Pre-approval means that a lender has looked at your financial history and decided how much money they’re willing to lend you. This gives you an idea of how much house you can afford and keeps you from falling in love with a property that’s out of your budget.
Next, it’s time to start shopping for a home. Once you find a house you like, your real estate agent will help you make an offer. If the seller accepts, you’ll enter into a purchase agreement that outlines the terms of the sale.
Now it’s time to get a home inspection. This is important because it gives you a chance to back out of the deal if there are any major problems with the property. Once the inspection is complete, you’ll need to apply for homeowner’s insurance.
The next step is securing a loan from a lender. Your real estate agent can help you compare rates and choose the best option for you. Once you’ve chosen a loan, your lender will order an appraisal to make sure the property is worth what you’re paying for it.
If everything goes well on the loan, the next step is to schedule a closing date. This is when the sale of the property will be finalized and you’ll officially become the homeowner. On closing day, you’ll sign a bunch of paperwork and hand over your earnest money deposit to the seller. Congratulations, you’ve just closed on a house!
What Is the Role of the Escrow Services for Closing on a House?
During the steps to closing on a house, escrow services are commonly used to hold onto important documents and funds on behalf of the buyer and seller. We also help you to avoid the common issues you might encounter with closing on a house. The escrow company acts as a neutral third party to make sure that all steps in the home-buying process are followed correctly. This includes ensuring that the correct paperwork is signed, that the buyer has paid their deposit, and that the seller has delivered the keys to the property.
In some cases, buyers arrange to pay for their entire purchase price at closing through a mortgage loan. In other cases, buyers may need to bring cash to closing to cover their down payment and closing costs. If you’re paying cash for your home, you’ll need to have proof of funds ready to show at closing. This could be in the form of a bank statement to ensure that you have enough money to cover the purchase of the home.
Your agent or closing attorney will go over all of the paperwork with you before you sign, but it’s still important that you understand everything you agree to. This includes the sales contract, loan documents, and any other paperwork associated with the purchase of your home.
Be sure to ask questions if there are any terms or steps in the process that you don’t understand. It’s better to ask now and get things clarified than to wait until later and find out that something wasn’t done correctly. Once everything is signed and sealed, the keys to your new home will be handed over to you. Congrats!
What Is the Role of the Real Estate Agent in the Steps to Closing on a House?
The real estate agent’s job is to facilitate the sale of the property and to protect the interests of the seller. The agent will negotiate with the buyer on behalf of the seller and will help to ensure that all of the necessary paperwork is completed. The real estate agent will also be present at the closing, where they will hand over the keys to the new homeowner.
What Is the Role of the Lenders in the Steps to Closing on a House?
The lenders are responsible for providing the funding for the purchase of the property. The lenders will also be involved in the underwriting process, which is used to determine whether or not the borrower is a good candidate for a loan. The lenders will also be present at the closing, where they will sign off on the loan and provide the funds to the buyer.
What Should I Look for When Choosing a Lender?
When choosing a lender, consider the following:
- How much money you will need to finance your purchase
- The type of loan you qualify for
- The interest rate and fees associated with the loan
- The terms and conditions of the loan
What Are Some Tips for Making an Offering on a Property?
When it comes to making an offer on the property, here are a few tips to keep in mind:
- Have your finances in order before making an offer. This means being pre-approved for a mortgage and having a good idea of how much you can afford to spend on a property.
- Keep your offer simple and straightforward. The more contingencies and conditions that are included in your offer, the less likely it is to be accepted by the seller.
- Don’t be afraid to negotiate. In many cases, the seller will be open to negotiating on price, repairs, or other terms of the sale.
- Be prepared to move quickly. Once your offer is accepted, you will need to move forward with the loan process and schedule.
Closing costs are one of the steps to closing on a house, and they’re typically around 2-5% of the loan amount. This fee covers things like the title search, appraisal, and loan origination.
You’ll also need to come up with the money for a down payment, which is usually 20% of the purchase price.
So if you’re buying a $200,000 home, you’ll need to bring $40,000 to the table.
If you don’t have that kind of cash saved up, you may still be able to qualify for a loan with a smaller down payment, but you’ll likely have to pay for private mortgage insurance (PMI).
It’s important to close on a house so that the sale is official and binding.
During the steps to closing on a house, pre-approval can be defined as a conditional commitment by a lender to provide financing up to a specified amount for a specified period of time, on the condition that the borrower meets specified requirements. A pre-approval is not a guarantee from the lender that you will actually receive the loan.
Earn an income at a certain level, have certain debts, and agree to make a down payment of a certain size, conditions are met, such as an appraisal of the property you’re buying and verification of your employment and income. This is when you’ll need to finalize your loan application and get all required documentation in order. The underwriting process can take a few days or even weeks, so be patient.
What’s the Move-in Process Like?
After completing the steps to closing on a house, the move-in process is pretty straightforward.
You’ll just need to make sure that the utilities are turned on in your new home and that you have a forwarding address set up for any mail that needs to be redirected. The steps to closing on a house can seem daunting, but as long as you’re prepared and organized, it will go smoothly. Just be patient during the underwriting process and enjoy your new home once everything is finalized.
What Are the Steps to Take After Closing on a House?
Once you have closed on a house, there are a few steps that you need to take in order to make sure everything is in order. First, you need to change the locks on all of the doors and set up your security system. You also need to forward your mail to your new address and update your driver’s license and vehicle registration to match. Finally, you need to notify your utility providers of your new address and set up a service at your new home.
How Do I Set Up Utilities in a New Home?
In order to set up utilities in your new home, you will need to contact the providers for electricity, gas, water, and trash service. You will need to provide them with your new address and some other information in order to get the service started. Once you have set up your utilities, be sure to test everything to make sure it is working properly.
What Else Do I Need to Do After Closing on a House?
There are a few other things that you should do after closing on a house. These include getting homeowners insurance, filling out a change of address form with the post office, and making an inventory of your belongings. You should also take some time to clean the house from top to bottom before moving in.
Join the Galaxy Title & Escrow Family
The steps on closing on a house require patients and planning but imagine the feeling you’ll get when you walk through your dream home. Real estate transactions strive when all the pieces come together and you feel prepared in the hands of experts. Galaxy Title & Escrow provides you with the resources to complete your escrow and title service needs in South Florida. If you’re interested in joining the Galaxy Title & Escrow family, feel free to reach out to us.
Mitchell has been a licensed attorney since 2014 and has practiced in both the transactional and litigation fields of law. His experience allows him to approach every transaction with a depth of knowledge and practical experience most attorneys do not possess. Mitchell prides himself on providing top notch service to his clients.