What is Closing?
A Closing (also referred to as settlement) is the final step in executing a real estate transaction. The closing date is set during the negotiation phase and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred from the seller to the buyer.
Steps To Close A Real Estate Deal
- The 1st step for a buyer after signing a contract is to place the agreed deposit in an attorney’s escrow account. Escrow is an attorney’s trust account or a title company’s escrow account holding the buyer’s funds to be applied to the purchase price at closing. Having a neutral third party throughout the real estate transaction keeps all deposited in a secure account which can be released only upon agreement of all parties.
- A title search must be conducted to ensure there are no liens or encumbrances on the property and only the seller can claim ownership.
- It is customary that the buyer obtains title insurance, which protects the buyer against any claims of ownership asserted by any other party that may be made following the purchase. Title insurance provides the buyer peace of mind when buying a property and can compensate you for any loss due acquiring a home with a faulty title. Florida National Title will help the buyer obtain necessary title insurance. Title insurance also protects the seller to the same extent as the buyer. In Florida, a seller warrants that the title being conveyed to the buyer is a good title and the seller is financially responsible for any loss the buyer incurs if the seller’s title is defective.
- Being pre-approved for a mortgage is not required, but a pre-approval will give a seller confidence that the buyer will be able to complete the sale if a contract is signed. This confidence can lead to the acceptance of a pre-approved buyer’s offer when a seller is confronted with multiple offers. Being pre-approved tells the seller you are financially prepared. Once you actually apply for a mortgage, it allows you to take advantage of rate locks which can protect the buyer from rising interest rates.
- Complete a home inspection. While not required, a home inspection identifies any potential problems for the seller to fix. Depending on how the contract is written, if the seller refuses to make repairs the buyer may have the right to cancel the contract. You may want to consider renegotiating the purchase price to allow the buyer and seller to share the cost of repairs.
- Lock in your interest rate in as soon as possible. Reputable lenders will monitor variable interest rates, so you can lock in rates when they are at their low point. You can also follow rates on the lender’s website. Since prices fluctuate tremendously, you should be satisfied with reasonable prevailing rates depending on present market conditions, your state, and credit rating.
- The final walkthrough is one of the last steps before the closing. This final opportunity to view the property before closing will disclose if anything was removed or damaged before you move in.
- The closing! During this final and critical step, many documents will need to be signed. Read each page or have a knowledgeable closer advise you what you are signing.
Florida National Title has years of experience guiding Florida homebuyers through the real estate purchase and refinance experience and have helped them solve the problems that come up in the process. We will decipher the “legalese” and explain what we need and why we need it each step of the way. The blogs to follow will address specific issues to guide buyers to understand the process better and to help them avoid many of the pitfalls. Call us at (561)408-0729 or visit our website at.
Florida National Title Services, LLC
250 S. Central Blvd., Suite 101
Jupiter, Florida 33458
Phone: (561) 408-0729
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