Whether you’re a real estate agent or a first time home buyer, closing on a home is the step you look forward to the most. Buying or selling a home is a long and complex process. However, this final step is what makes it worth all of that hard work. But there are vital things you need to know about the closing process before you can relax.
What Is Closing on a House?
Closing is a term every real estate agent should know, as it’s the final step in buying a house. After an offer has been made, the home inspection completed, and it’s been confirmed that the buyer qualifies for a loan, the sale can be finalized and closed.
How Long Does It Take?
The closing process in Massachusetts can take between 45 and 60 days from start to finish, so it’s not as quick as one might assume. The process takes this long because it usually takes between four to five weeks to get a mortgage commitment when the market is hot. If it’s not hot, it could take as little as three weeks.
Closing Day
Once closing day arrives, the buyer and the seller, and/or their attorneys, will meet to review the closing documents. The buyer signs a deed, mortgage, and other necessary documents while the seller signs the closing documents and transfers the property’s title to the buyer. The buyer also gets the keys to the house during this process.
To make sure everything is in order, the attorney or title company will go over the documents line-by-line. They do this to ensure that the buyer understands what they are signing and that they agree to the terms. If they do, the deed can be signed and will receive copies of all of the closing documents for their records. If the buyer doesn’t understand the terms, they’ll answer any questions they have so their decision is fully informed before signing the deed. However, if all goes smoothly, this process shouldn’t take more than an hour.
Closing Fees
For both the buyer and the seller of a house, the closing process also has some fees to budget for. These fees are especially critical for the real estate agent. After all, this is where they get paid after a property or home purchase.
This expense might disappoint some buyers and sellers. Luckily, the financial blow is softened by the fact that both parties typically pitch in to cover closing costs. Buyers do cover most of it (3% to 4% of the home’s price) compared with sellers (1% to 3%).
However, not all of these fees are paid at once, so you’ll have some breathing room. Some expenses, like the home inspection fee, must be paid upfront before the home is officially sold. Others, like property taxes and homeowners insurance, are recurring. The rest, including the real estate agent’s commission, are paid at the end, when the home closing is complete and the house’s keys are in the new owner’s hands.
Closing on a house may seem a little overwhelming, but it’s the most important step and more than worth it. Be patient and prepared and you’ll have an easy experience.
Categorised in: Business, Real Estate Tips