The Real Estate Closing Process Explained

Anyone who has purchased or would like to purchase real estate longs for that coveted day when he or she can look forward to the closing. A real estate closing is the end of the long and sometimes agonizing process of buying a house. Once you take these final steps, you will be a proud homeowner. For those new to the process of purchasing real estate, here is a breakdown of the closing process.

Part One of the Real Estate Closing Process: Transition

If you are about to move into your new home, you’ll want to try and minimize the financial overlap between the new home you the one you are paying for now. Try to time your lease so that it expires a few days after the closing, if possible. If you are selling your current home, try to sell a little before the closing on your new home. You’ll also want to make sure that the closing will happen while your mortgage loan and its terms are still in place.

Part Two of the Real Estate Closing Process: Paperwork

Assuming you are getting a mortgage loan, you’ll be signing your mortgage paperwork in order to get the money you need to close on the house. You’ll sign the mortgage itself, plus some ancillary documents detailing your responsibilities to the mortgage lender.

You’ll then sign the housing paperwork. This will include a statement of all your payments, the deed to the house, prorated agreements (Both you and the seller own the house for some part of the month that you buy it. These agreements cover how house expenses incurred during the month will be divided.) and tax receipts.

Part Three of the Real Estate Closing Process: The Sale

Now is the time to pay up. You should have a certified check to cover the closing costs, escrow account and down payment. You will provide this to the real estate agent handling the closing, along with the mortgage lender’s check for the remainder of the purchase amount.

The End of the Real Estate Closing Process: Home Ownership

Once you’ve signed the deed and other paperwork and handed over the funds, congratulations, the house is yours! Closing on a house can be a momentous occasion in a person’s life. When your closing comes, get a solid amount of sleep the night before and give yourself the whole day to handle the closing. The closing itself should only take an hour or two, but you want to give yourself plenty of time to enjoy the process of buying and finally owning a home of your own.