How to Navigate the Closing Process as a Buyer

Purchasing a house is not a quick and straightforward process. Not only do you have to get your finances in order, find the perfect property, and make the right offer at the right time, but there’s also a lot of complicated paperwork happening behind the scenes. Every step is a process in and of itself – including the last one. So don’t make the mistake of thinking you’re done once your offer on the new home is accepted because you still need to navigate the closing process, which takes an additional 30 to 45 days. During this time, both you and the seller will get all your property-related affairs in order, and the ownership will be transferred from them to you. So what exactly do you need to do?

Consider hiring an attorney to help you navigate the closing process

It is certainly possible to acquire real estate entirely on your own. But it’s significantly easier if you have the help of someone familiar with the process, especially if you’re buying your first home and have no prior experience. Most of the time, a real estate agent is the right professional to turn to. They can help you find the perfect property and make the right offer. But in this final step, hiring an attorney is the more logical choice. A real estate attorney will guide you through the process while representing your best interests and ensuring everything is above board. They will be especially helpful with all the paperwork, which you may find confusing due to the complicated language in it.

Start by opening an escrow account

The first step on your journey to learn how to navigate the closing process will be to open an escrow account. This is essentially a placeholder account where the funds for the home purchase will sit until the house has changed ownership. It is there to protect both you and the seller from potentially serious financial losses. This is where you will deposit earnest money to show you’re serious about making the purchase and where you will then also deposit the rest of the funds for the purchase when the time comes. The seller cannot take the money until the purchase is complete, but the money simply being there is proof that you are also not trying to scam them out of their property. While preparing to buy a home, you may already have opened an escrow account for this purpose. But if you haven’t, now is high time.

For extra security, do a title search and get title insurance

It may sound absurd to you, but some people will try to sell properties that others have claims to – either because they don’t know better or because they’re trying to get rid of them in any way possible. To make sure you’re not going to have any issues down the line due to undisclosed mortgages or claims from heirs, you weren’t aware of, you should do a title search and even purchase title insurance. In other words, you should check that no one else has a claim on the home and protect your claim on it instead. This will save you from financial loss due to potential title defects and give you the peace of mind that the property is truly yours.

Conduct a home inspection and check for pests

Real estate isn’t cheap. And if you’re spending hundreds of thousands or even millions, you want to make sure you’re getting what you paid for. The closing process is your last chance for that. So don’t take the seller’s word. Do a home inspection yourself in person. Check the standard problem areas like basements, windows, and bathrooms. Look for cracks, damage, mold, and other serious issues. You don’t have to worry about pests, though – you’ll get a professional to do a pest inspection separately. They’ll let you know if they find something.

And what if they or you notice some issues? Well, moving experts at Helix Move VA advise that you never move into a home that you cannot live in for the foreseeable future. You’ll just cause additional costs and problems when you have to move out temporarily for renovations or permanently for a better place. Instead, you have several options:

• you can back out of the purchase if the problems are serious,
• you can buy the property as is but renegotiate a lower price so that you can afford the reparations later,
• or you can have the seller fix the problems before you complete the purchase.

Negotiate and renegotiate costs

You may think that you’ve committed to that price once your offer’s been accepted. But that’s not true. You still have time to get a better price that gives you more value for money. For example, you can negotiate a lower price if the property doesn’t live up to the listing. Or, if the seller is willing to do some home improvement that increases the property’s value, you may offer to pay more for the benefit of them doing all the work in your stead. Whatever changes to the price you want to make, now is your last chance.

Lock in your interest rate if you can

If you’ve reached the closing period, you’ve already been pre-approved for a mortgage. But depending on how long it took you to get to this stage, things may have changed since your pre-approval. So now is the time to look into a better mortgage option, if there is one. Ideally, you’ll want to lock in your interest rate. Because of the amount of money you’re borrowing (and paying back), even minor increases in interest can be major financial burdens. Remember that you’ll still have all your regular expenses plus the home maintenance you have to do as an owner. You don’t want to overburden yourself with a bad mortgage on top of that.

Resolve any contingencies by the dates set in your agreement

The closing process has stages. There are different things to do at different times. One of those things is the removal of contingencies. A contingency is basically a condition that needs to be met when you’re buying a property. There are five typical contingencies:

• you have obtained financing that does not exceed what you can afford
• the home inspection has not revealed any problems
• the pest inspection has not revealed any problems
• known problems have been disclosed by the seller
• the seller has completed repairs and renovations they’ve agreed to do

The buyer and the seller agree to set dates by which each of these conditions needs to be met. In some cases, you must state in writing that a specific contingency has been removed. In others, simply defaulting on making a statement is considered a contingency removal. And this is why it’s very important for you to understand the specifics of your contract.

Transfer the remaining funds to complete the purchase

If you’re happy with the property’s condition and the price you’re paying, it’s time to put your money where your mouth is. Or rather, where your escrow account is. The earnest money that you’ve already paid goes toward your downpayment. So you’ll subtract that from your price and transfer the remaining funds.

Do one final inspection of your contract, funds, and the property

Before you sign the closing papers, visit the property one last time, just in case. You’ll want to make sure no damage has occurred since the last inspection. This is also a good time to simplify the moving process by planning what you will move where and how. You can also use this opportunity to practice one of the best moving hacks to save time – draw up a quick plan of the house for yourself and your movers so you can plan the moving-in process. This is especially important if the seller has done any renovations or upgrades since the last time you saw the property. You’ll basically want to note any changes, as this is your last chance to back out.

Understanding the paperwork is the key to navigating the closing process

A huge part of why navigating the closing process is so difficult is the paperwork. There’s a lot of it, and what is more, it’s difficult to understand the legal jargon in it. Every contract is different, so previous experience won’t necessarily help. But no matter how tedious it seems, read every page in full carefully. It will undoubtedly help you navigate the closing process and eliminate unwanted surprises. Consult a lawyer if you need to. The little things often make a big difference in such paperwork. So it’s vital that you know exactly what you’re signing before you sign the closing papers.

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The final step in buying a house doesn’t have to be complicated – just follow these steps to navigate the closing process effectively!

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