Buying a home can seem like a big process, with so many steps and details to attend to. As a real estate agent, I want to make sure you are prepared to take those steps so I've created a three part series about the home buying process.
The Home Buying Process - Part 3:
Escrow and Closing
The seller accepted your offer and you've both signed the purchase contract. Now it's time to go through escrow and close on your new home!
During the escrow process, the bank and title companies work to produce money and transfer ownership of the property from the seller to the buyer, and distribute the money and property exactly as described in the purchase contract. Escrow takes time, in some cases 45 days or more, and there's a lot that goes on in that time. Your agent and the seller's agent will work to take care of as much of the heavy lifting as possible; we serve our clients and use our network of resources to work through the process. There are a few things that happen during escrow before you can close on your home.
The Home Inspection is an important part of the escrow process. It happens typically within 10 days of the offer's acceptance, and will check for any issues with the property's exterior and interior elements. Should the inspector discover defects, it may require re-negotiating on the contract or in some cases even cancellation of the purchase contract. As the buyer, you do also have the option to proceed with the contract and handle the issues on your own.
A Title Search will be conducted to make sure that the seller is in fact the true owner of the property and that there aren't any liens or other claims on the property. As a buyer, you may also want to purchase title insurance in case there are errors or mistakes in the records or review process. Once the title search is completed, you will have the option to review the title and can cancel the contract if you have any concerns.
A Home Appraisal also occurs during escrow. The appraisal is different than the inspection in that the appraisal simply places a true value on the home. The lender will require it in order to finalize your mortgage; they want to be sure that the value of the home is at least as great as the value of the loan.
You and your agent will also have the option to perform a final walk through to make sure that the home is in the agreed upon condition, and that the terms of the contract have been fulfilled. There are often clauses in the purchase contract that refer to cleaning and pest inspections, and the final walk through gives you the opportunity to ensure that these steps have been completed, too.
On the day that escrow closes and you complete the purchase of your new home, you will also have closing costs. Depending on the type of loan you're using, the costs may be included, but you may also pay out of pocket for some expenses.
Closing costs may include:
Loan origination fees, appraisals and reports
Surveys and inspections
Title insurance, notary and escrow fees
Recording fees and stamps
Your agent and your lender will determine the exact closing costs, and some times closing costs can be negotiated in the offer.
There's a lot that happens when it comes to buying a home, and I want to make it easy for you!
As a real estate agent, it is my mission to make the home buying process as smooth and effortless as possible. I have a wealth of resources at my disposal, and a service minded approach in all that I do. Your goals are my goals. If you need any assistance with pre-approval, finding the right property, submitting an offer, and getting to the closing date, I hope that you'll reach out.