Mar
03

The Basics of Closing

Contract on typewriter

Whether you’re in the middle of a Frisco relocation or are simply buying or selling your first home, you may not have a full understanding of what goes into closing. This is perfectly understandable and very common, so we want to provide some information that summarizes the basics of closing. Understanding the fundamentals will help you better prepare to make an offer on a new home.

Closing is also known as the “settlement” of the deal—this is the point when the mortgage is executed, the title is transferred, and essentially, the deal is set in stone. Hopefully, by this time, the buyers are aware of all the costs associated with closing. Once your mortgage is approved, the lender must provide you with a “Good Faith Estimate” of all the associated costs. There is a time limit for them to do this that varies by state. You should also receive an outline of the closing process at this time.

Once both parties agree in a price, the countdown to closing begins. At this point, you should have settlement agent execute the rest of the process. This party will make sure that the down payment is put into an escrow account until the deal is fully executed. If you don’t already have a settlement agent, ask your real estate agent for a referral.

At this point, the preliminary title work begins. During this phase, the title company searches public records for any information related to the property’s title to make sure that there aren’t any unresolved issues related to the property, such as a judgment or outstanding taxes. This ensures that the buyer does not become responsible for anything they were unaware of before closing. Once this is done, a HUD-1 Settlement Statement, which outlines all the costs for both the buyer and seller, is typically completed. Want to learn more about Toyota’s relocation? Click here.

There may be other closing tasks to complete, but once you’re at this point, the home is yours. If you’re currently in the market for a home or want information about Frisco relocation, click here.

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