10 Steps to Closing on a House

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The house closing process, which in different parts of the country is also known as "settlement" or "escrow," is increasingly computerized and automated. In many cases, buyers and sellers don't need to attend a specific event; signed paperwork can be sent to the closing agent by overnight delivery.

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Steps to Closing on a House 10 Slope Style Realty

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The house closing process, which in different parts of the country is also known as "settlement" or "escrow," is increasingly computerized and automated. In many cases, buyers and sellers don't need to attend a specific event; signed paperwork can be sent to the closing agent by overnight delivery . Closing occurs when you sign the papers that make the house yours. But before that magical (and often stressful) day arrives, a long list of things have to happen. This article will explain what you can expect during the closing process from the moment your offer is accepted to the moment you get the keys to your new home. 

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Open Escrow 1. Escrow is an account held by a third party on behalf of the two principal parties in a transaction. Because there are so many things that have to happen to complete a home sale, the best way to prevent either the seller or the buyer from getting ripped off is to have a neutral third party hold all the money and documents related to the transaction until everything has been settled . 2 . Address Legal Issues Get the title insurance cleared to prevent any legal claims down the road. You may even consider a real estate attorney, not just for the title, but for all the paperwork yet to come.

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3 . First, make sure you’re not paying any unnecessary fees. A lot of services will sneak in unnecessary fees that a real estate attorney can help you flag. Then, of the remaining fees, decide who pays what. The seller usually ends up paying most of the closing costs. 4. Home Inspection Hire an inspector (usually by Realtor recommendation) to check out the property . If you find a serious problem with the home during the inspection, you'll have an opportunity to back out of the deal or ask the seller to fix it or pay for you to have it fixed (as long as your purchase offer included a home-inspection contingency).   Negotiate Closing Costs  

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5. This is a separate step from the home inspection. A professional will come out to look for termites, rodents, etc. and any damage caused by such critters . I f inspections reveal any problems, you may want to renegotiate the home's purchase price to reflect the cost of any repairs you will need to make. You could also keep the purchase price the same but try to get the seller to pay for repairs . 6 . Lock Interest Rate With the help of a lender, lock in the lowest rate you can get before signing papers . A good lender will watch interest rates closely for you and tell you when rates are at a low point so you can lock then. You can also watch interest rates by yourself online using your lender's website. Pest Inspection

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7 . Make sure all terms in the original offer have been met to satisfaction . These contingencies often must be removed in writing by certain dates (known as active approval), which should also have been stated in your purchase offer, for your deal to close. However, in some purchase agreements, contingencies are passively approved (also known as constructive approval), if you don't protest them by their specified deadlines . 8. Final Walk Thru   One of the last steps before you sign your closing papers should be to walk through the property one last time. You want to make sure no damage has occurred, and nothing has been removed that is included in the purchase Address Contingencies

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9. You most likely deposited earnest money when you signed the purchase agreement. The purpose of this deposit is to let the seller know that you are serious, or earnest, about your intentions. After all, the seller is going to take the property off the market. If you back out, the earnest money goes to the seller as compensation. If the seller backs out, the money is returned to you . 10. Sign Papers Obviously, one of the most critical steps of closing is signing the paperwork. There will probably be at least 100 pages. Although you may feel pressured by the people, who are waiting for you to sign your papers, like the notary and your mortgage lender, read each page carefully; the fine print will have a major impact on your finances and your life for years to come. In particular, make sure the interest rate is correct and that there is no prepayment penalty. More generally, compare your closing costs to the good faith estimate you were given at the beginning of the process and throw a fit about any fees that are off by more than 10 %. Down Payment

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