Technically, the “closing” of a deal occurs when you sign the papers that make it yours. But before that can happen, there are some things you need to know. A little practical knowledge of how the real estate transactions work can go a long way.
1. Walk through the property
Prevention is better than cure! Inspect the house again to make sure it is in good condition, as agreed by all parties. During the walk-through, make sure that all terms of the agreement, such as appliances and furniture, are met.
2. Secure the required insurance policies
To get a mortgage, most lenders require the buyer to purchase homeowners insurance. A homeowner’s insurance policy protects both the buyer and the lender, in case something happens to the home in the future.
3. Open an escrow account
An escrow account is an account held by a third party on behalf of the two parties in a transaction. This makes it easier and more comfortable as there are many activities required to complete a home sale. In addition, an escrow account is the best way to prevent the seller or buyer from committing any kind of fraud, as the money and related documents are with a neutral third party.
4. Lock in your interest rates
Since interest rates are unpredictable and fluctuate several times a day, you should monitor and lock in interest rates if you haven’t already. Watch the market and lock in your interest when rates are lowest and most affordable.
5. Have a pest inspection carried out
A pest inspection involves a specialist who ensures that your home does not have wood-destroying insects such as termites or carpenter ants. Even a small termite problem can spread and destroy the entire house. So deal with any minor pest problem immediately, if it exists.
6. Get title insurance
Title insurance is a policy that protects the buyer and lender when there are problems with the land after the sale has been made. When getting title insurance, find out which policy offers the best protection for the least amount of money.
7. Consult a lawyer
It is difficult to create legal documents and confirm the laws related to the real estate market. Hiring an experienced attorney will make things easier for you and help you close documents.
8. Re-negotiate your offer
If your inspection reveals flaws or defects in the property, you may want to reconsider the offer to reflect the cost of any repairs.
9. Finalize your finances
Before you close the deal, arrange all your finances and make sure you have the money you need to pay the closing costs and your down payments.
10. Plan and attend the closing
Sign the towering paperwork and make sure both parties are there for the closing. Also make sure that the interest on the papers is correct and there is no prepayment penalty. If you have hired an attorney, he/she must be present at the venue with you to ensure that all paperwork is successfully completed.
Closing a real estate deal can be tedious, but once the deal is done, you can breathe a sigh of relief. If you’re ever unsure about what you’re doing, consult a real estate expert or lawyer to help you.