13 Steps to Closing a Real Estate Deal

Closing a real estate deal can be a time consuming and stressful exercise. It may involve lots of steps and procedural formalities. Closing of the deal falls when you sign the papers that make the house in your own. But before that happy day arrives, numerous things have to happen. Read this article to know some important guidelines for a property buying. These guidelines should be followed during the closing process from the moment your offer is accepted to the moment you get the keys to your new home. The steps are:

1. Opening of Escrow Account

Escrow is an account which you never heard before. This account is held by a third party on behalf of the two principal parties that are involved in a transaction. Since home sales involve multiple steps which can take your ample time. The best way to alleviate the risks of either the sellers or the buyers have, is to have a neutral third party which holds your all the money and documents related to the transaction. Once all procedures and formalities are done, the money and documents are moved back from the custody of the escrow account to the seller and buyer.

2. Title Search and Title Insurance

Do a title search and obtain a title insurance. These two significant things will provide you peace of mind and a legal safeguard. So. That the property you buy, no one else can utter to claim it. A title search is an inspection of public records to determine and confirm about property's legal ownership. The title search is to find out the claims. If you find any claims, these may need to be fixed before the buyer gets the property. Title insurance is to protect the holder from financial loss sustained from defects in a title to a property and protect both real estate owners and lenders against loss or damage.

3. Hiring an Attorney

The best decision is to get a professional legal opinion on your closing document. Well, it is optional whether you want to get a legal aid or not. Legal opinion will help you in your potential problems. Hiring an attorney will give you multiple benefits.

4. Importance of Getting Pre-Approved for a Mortgage 

To close a deal getting a pre-approved for a mortgage is no important. It only helps you in closing the deal quicker. Getting pre-approved for a mortgage will help in bargaining. It will give you more bargaining power and helps you in a negotiation.

5. Interest Rate

Try to lock your interest rate for the loan in advance. For example: a rise of 0.5% interest rate can significantly rise your repayment amount and repayment tenure. If you lock your interest rate it means you are secured from future market fluctuations which can be a big risk.

6. Procedure Costs for Negotiation

All the steps from an escrow account to real estate attorney have some entities costs and service costs. Many agents take advantage of consumers' ignorance and charge high fees. If you know about the junk fees and other administrative fees, you can negotiate or eliminate the procedure cost.

7. Complete the Home Examination

A complete and thorough examination of the home is compulsory. Inspect the condition of the building. If you find any problem in the house, you can back out of the deal. So, it is a very important point.

8. Complete the Pest Examination

A pest examination is a different inspection. This inspection involves a specialist in making sure that your home does not have any wood-destroying insects, like termites or carpenter ants. The pest problem is a devastating for properties. So, make sure your new home is pest free.

9. Renegotiate the Offer

When you inspect the home and it shows any problem regarding condition or pest. You can re-negotiate after making an offer. You can lower down the cost of the home after the inspection.

10. Remove Contingencies

If your agent helped you to crack a good purchase offer, it should be contingent on different things which include:

• Interest rate.
• Home inspection.
• Agreement to repair.
• Pest inspection.

As a part of active approval, such contingencies must be mitigated in writing.

11. Funding Requirements

You have to deposit earnest money when you signed the purchase agreement. In order to complete your purchase, you will have to deposit funds in the escrow account.

12. Final Scrutiny

One of the final step, you should walk through the property one last time. Final scrutiny of the property and documents are important, before signing the papers.

13. Understand the Documents

Paperwork is critical. So, understand the all clauses of the agreements. Before signing, you should understand all the documents