What is the Real Estate Closing Process Part 2

Welcome to our two-part blog post about what to expect from the real estate closing process. Part one covered the mortgage application, opening escrow, title examination, inspections, and appraisals. Part 2 explains the final stages of completing the closing process.

The Steps of the Real Estate Closing Process

Possible Renegotiation

With the home inspection and appraisal complete, it might be necessary to consider renegotiating the terms or price. If the inspection uncovered significant repair problems, you might need to add a contingency for the seller to address them. You could also renegotiate the price to account for the cost of repairs. If the appraisal comes in low, the lender might not approve your mortgage without a reduction in the price. Renegotiation isn’t always necessary, but it is something you should expect.

Obtain Homeowners Insurance

Most lenders will require homeowners insurance before issuing final approval. They’ll also want you to carry coverage during the loan term. This insurance covers potential damage to the home from events like fire, vandalism, or natural disasters. It may also cover liability for accidents and injuries on the property. Lenders want you to have this coverage to protect their investment in the property. Take the time to compare policy coverage and rates to find the right fit for your needs.

Finalize Your Mortgage

Finalizing your loan is one of the last critical steps before closing on a home. The lender will review the documents and give one final check on your financial status. However, it can take days or weeks before the lender issues final approval. That’s why you want to bring all necessary documents and review the terms early.

Property Walk Through

The final walk-through is your last chance to inspect the property before closing. You’ll typically have an opportunity to do this a day or two before closing. The walk-through ensures the home is in the agreed-upon condition, with all repairs completed and no new issues present. During the walk-through, check that appliances are functioning and fixtures are intact. Keep your eyes open for any signs of new damage. If you discover issues, take notes and address them at closing.

Closing Day

On closing day, you’ll sign the final documents, including the deed and loan agreements. Bring necessary items like a photo ID, proof of homeowner’s insurance, and a cashier’s check for any remaining closing costs. Once all parties have signed the paperwork, you may receive the keys. Closing day is also when the escrow agent releases the funds.

That is the complete real estate closing process. As you can see, it takes time, and some stages can be complex. However, having a good closing company can simplify the process. They can help with title searches and escrow while guiding you through the process.

Do you need help with a real estate closing? Click here to contact First National Title & Escrow. We offer expert title services in many states. Let us help you achieve a smoother closing process.

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