The closing process involves more than you would probably ever want to know, really. The details, the paperwork, the negotiating, and all of the parties involved—it can all be a little overwhelming.
What You Need To Know About The Closing Process
This is why letting a real estate agent help you and allowing the professionals to do their jobs is really the best way to go. Still, it is wise to have a general idea of what to expect so that you are not anxious and nervous about every piece of paper and every signature that you provide.
Further, it is best to know what to expect not only in paperwork, but also in terms of closing expenses. Unfortunately, sometimes home buyers are unaware that closing costs, escrow fees, and title insurance exist, and they are caught financially off guard at the end of the process. So, let us take a look at what may be around the corner.
For starters, “closing” on a house is defined as: a point in time when the title of one property is transferred from the current owner to the buyer; and simultaneously, a lender gives the buyer/borrower a mortgage. While this might sound very official and a little scary, closing on a home can be very exciting and something to celebrate. Just keep your eye on learning about what will happen when that day comes, and you will be able to relax since you know what to expect.
Get Help From A Realtor
When the time comes to close on the home that you are purchasing, timing is important. A settlement agent can help you navigate the process. You can find settlement agents by asking around, by asking your Realtor, or inquiring with your lender who they typically use. The settlement agent that you choose will begin by requesting preliminary title work from a title professional.
The title professional will then look through public records for any information that is related to your home’s title. What is he/she looking for, exactly? Well, you would want to know if there are any flaws on the title, wouldn’t you? For example, what if the previous owner of your home had not paid taxes (either local or state) on the home? Or, what if there is an outstanding mortgage payment listed on the title, or a judgment on the property? These are important issues that must be uncovered before you take ownership of the home. And that is the goal here, to clean up the title and resolve any issues before closing.
The settlement agent will then handle the financial implications of the prior mortgage—whether it will be paid off or assumed by you (the buyer). The settlement agent may or may not request further inspections such as surveys, termite reports, and a property inspection. Once all seems to be in good order with the home, the settlement agent will prepare an HUD-1 Settlement Statement.
What Is A HUD-1 Statement?
This lengthy document outlines every cost for both parties involved in regards to closing. If you would like to see the form ahead of time, you can download a copy of a generic HUD-1 form online. Some homebuyers like to see all of the details, line-by-line ahead of time, while others would just prefer to sign where they are asked to sign.
When you get to the closing appointment, the settlement agent will go through everything on paper with you from start to finish and ask for your signature all along the way. When you are finished with this process and all numbers and letters are in order, the real estate property will be transferred from the seller to you—the buyer! This you can truly celebrate, and you can thank the professionals who have helped you along the way by doing their jobs well. Congratulations!
Article provided by a Fort Collins Realtor by the name of Allison Klein. For more information about buying a home please check out her Loveland CO homes for sale and Windsor CO homes for sale pages where she describes the home buying process in more detail.
