Buying a home is more complicated than buying goods at a store. For one, the process involves negotiations over price, as well as things like appraisals and inspections in order to ensure that you are getting your money’s worth. For another, real estate transactions have to go through what’s known as the closing process, in which the legal ownership of the property passes formally from the seller to the buyer. This process can be intimidating, especially if you don’t know what to expect, so to help you prepare for this final step, in this article, we will provide a summary of how residential closings work in order to help you prepare for yours.
- Enter Escrow – The first step in real estate closings is to enter what’s called escrow, in which a neutral third party takes over the care of all the finances and documents involved in order to protect both the buyer and seller.
- Choose a Closing Attorney – As we mentioned, residential closings involve a lot of complex legal paperwork, so it’s always best to hire an experienced closing attorney to help you file all the necessary documents.
- Arrange for a Home Inspection – Before agreeing to purchase the home, the buyer should schedule an inspection of the property to ensure there are no major problems, such as pest infestations.
- Renegotiate – If the inspection does turn up any concerns, the buyer can now renegotiate the terms in light of this new information.
- Sign the Paperwork – The final step in all residential closings is to sign the paperwork that legally transfers ownership from one party to the other.