6 Steps to Closing

1.  Purchase Agreement: The buyer will complete a purchase agreement which is an offer stating the terms for purchasing the home.  Price is important, but it isn't the only factor to consider in the offer.  Other items include the date of closing, date of possession, if the buyer must sell  a home first, if the buyer is pre-approved, the inclusion of personal property in the sale, amount of  Earnest Money, and the type of mortgage  because this can affect the amount paid by each party in  closing costs  for financing.  There are also charges that can be paid by either party or split which include:  title work, title insurance, the survey, lender required inspections, and the closing of the transaction.  The buyer will also acknowledge receipt of the Seller's Residential Sales Disclosure.  The seller will review the offer and can accept it, reject it,  or present a counteroffer stating the changes required for a sale.  Counteroffers can go back and forth until an agreement is reached and signed by both parties.  Contracts often have contingencies, or conditions which must be met or the buyer or seller can back out the contract.  Inspection and financing contingencies are common.

2. Inspections: If the buyer reserved the right to have a home inspection of the systems and components or an inspection for  environmental issues  they must be completed by the deadline in the purchase agreement.  If the buyer finds a major defect that was not previously disclosed, (this does not include routine maintenance or minor repair items) the buyer may request repairs or a reduction in price in the buyer's inspection response.  If the seller is unable or unwilling to remedy the problem, the buyer may terminate the agreement. 

3. Financing:  If the buyer's offer was subject to obtaining a mortgage, this is the next step.  The lender will require an appraisal to confirm that the value of the home is acceptable as for the amount of the loan.  The buyer should obtain a written commitment for homeowner's insurance and verify if flood insurance is required.  The lender will also confirm that the buyer stayed approved.  The loan may be granted approval, rejected,  or have conditions which must be met to go forward. 

4. Now it is time to order the title work, title insurance, deed and the survey. This will confirm that the seller has the right to convey the property to the buyer and  establish the location and boundary lines of the property.  Once these are completed, the closing can be scheduled and the figures finalized for the completion of the closing documents.   The closing statement (or settlement)  is an accounting of all the costs in the transaction and who pays what. 

5.  Final Walk-through: prior to the day of closing,  the buyer should inspect the home to confirm it is in the condition agreed upon.  Personal property items that were to stay should be there.  All systems should be operable and any agreed upon repairs completed.  The seller should leave items such as garage door openers, appliance manuals and warranty information where they are easy to find.  If possible, compile a list of contractors who worked for you and any helpful hints you can think of  that you wished you had known when you were the "new" owner.   If the closing statement is complete, this is a good time to go over the numbers.

6. The Closing-  Everyone needs to bring a driver's license or other form of identification.  If you were told to bring funds for closing, it needs to be in the form of a certified check.  There are many documents that will need to be signed and it can start to feel like an assembly line, but feel free to ask questions  or stop to read something you don't understand.  When all the forms are signed, you'll get copies of everything.   

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