Smooth Sailing All the Way to Closing a Real Estate Deal


House hunting is by itself a rather stressful process. The need to close the contract only adds on to the stress. You could as well do with a few tips and some information to control the frustration involved.

The settlement process, also called “closing”, begins once you have signed the contract to buy a house. “Closing of escrow” is the process whereby the title of ownership moves from the seller to the buyer. There are a few things you need real estate closing | real estate closing costs and feesbefore that:

Arrange Finances
Firstly you need to secure financing, which means you need to avail a mortgage loan. You will have to furnish some financial details to the lender. This may include among others, a credit report, property survey, proof of income, current expenses, current appraisal and in certain cases, even an inspection to check for termites or radon gas, etc. It will most probably be approved within a few days thanks to the competition among lenders.

Take Homeowner’s/Hazard Insurance
You have to take hazard insurance as a means to protect the lender if anything happens to the house. This could be anything from fire or flood or some other disaster the policy covers. It is also called “homeowner’s insurance”.

Set Standards for Property Condition
You have to create some standards for yourself regarding the state you expect the property to be in on the day you move in. These could include a guarantee that there are no roof leaks/ plumbing leaks or that the pumps are in working condition or that windows are not damaged or that the yard is well-kept, for example.

Appoint a Settlement Agent
You have to find an experienced and reputable settlement agent and give his name to the real estate agent. Your agent will probably give you the names of settlement agents he has worked with in the past and set up everything for you. It is vital that you obtain all the associated fees and settlement costs. On Getting Through Closingthe other hand if you prefer to have an attorney in the settlement phase, it is better that you call upon him at least 1-2 months in advance. This will give him adequate time to look at the property and study all the documentation. The settlement agent will ask the buyer and seller for further information like the names and contact information of parties involved in the sale or purchase, and a copy of the contract. You may also have to give the settlement agent a paid receipt as proof of you securing a minimum one-year homeowner policy.

Being the buyer, it is your responsibility to see that specific processes like title insurance, property survey, title examination to ensure that there aren’t any other liens on the property and a payoff notice regarding the seller’s mortgage (a good realtor is supposed to do this for you) is done. It is also recommended to buy homeowner’s title insurance. Kindly note that it is normal for the seller to pay for the same in Florida, but it is negotiable. Whatever the decision, just make sure that it is spelled out in the sales contract.

Keep Track of Closing Costs
Make sure you receive your HUD-1 Statement that summarizes all your settlement expenses including taxes, pro-rated homeowner dues, etc. It is better to ask for copies of the basic settlement forms several days prior to the day of actual settlement as you can study the information it contains and be prepared for many kinds of questions.

Do a Walk-through Inspection
Before the finalization of the settlement you have to conduct a walk-through inspection of the property accompanied by your REALTOR® to make sure that there are no major problems. This includes ensuring that all appliances are intact and checking for any other flaws that were perhaps not there before. If at all any problems are identified or things are found missing, you have to let the settlement agent know immediately. A good REALTOR® will make it a point to accompany you.

The Settlement Day
Getting Through ClosingOn the day of closing (the settlement day), you will have to bring a loan commitment letter and a certified or cashier’s check for the down payment and any other costs that have been outlined to you as per the settlement. Do not forget to bring some identification for you like your driver’s license or passport. There may be extra costs like escrow for property taxes and insurance, first payment due, recording fees, etc. It is recommended that you bring your personal checkbook or some extra cash just in case you are charged some other fee that you did not expect.

The responsibility of a settlement agent includes explaining all details to you and double checking all figures for errors. The REALTOR® has to accompany you in examining the HUD-1 statement to ensure accuracy. Rest assured, you must do a final review of the documents, sign them and pay the amount. With this, the settlement process is complete and the keys to the property are given to you. You will then get a copy of the recorded deed and title insurance policy.

In case you cannot attend the settlement in person due to some reason, you have to inform the settlement agent about it in advance so that a Power of Attorney can be prepared. That’s it! Once all this is over, you can go ahead and move into your new home.

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