Updated: Jan 5
After all the paperwork, researching listings, and finally choosing a home, it may feel like most of your work is done. However, first-time home buyers may be surprised to discover that the closing process—or “sealing the deal”—may take upwards of 40-50 days and include further financial investment. It’s important to account for closing costs and time before beginning the home-buying process, so you’re not caught off guard.
Note that the closing process may vary, depending on the type of mortgage you applied for, the condition of the home, location, etc. It’s during the closing process that a real estate agent’s expertise can really shine and save you money, stress, and time.
After putting down your hand money—or a $500 or more deposit to the buyer that indicates an earnest intent to purchase the home as official closing paperwork begins, also known as “earnest money”—it’s time to conduct a home inspection. An inspection is conducted by a certified inspector and may take a few hours. Once it is complete, they will issue a list of observances and recommendations on the state of the house to the buyer. This document can serve as a negotiating tool to lower the buying price or back out of the deal altogether.
Not all closings have a home inspection. On whether a home inspection is beneficial to your home-buying journey, consult your agent.
The next step is getting the bank involved. If you are getting a mortgage, the bank will appraise the home to ensure it’s worth the price the sellers are listing it for. The bank’s findings will determine whether the buyer will proceed or back out of the deal. It’s important to include such contingencies in any paperwork you sign—something a buyer’s agent will often do to ensure you are not trapped in an unwanted deal.
Title Search and Title Insurance
This part may especially be new to a first-time home buyer. A title search verifies whether the home’s title has any liens (debts) or other issues before it’s transferred to the buyer. It is recommended to purchase title insurance so you are protected from any issues that may occur or are discovered after the title is transferred to you.
It’s time for closing day! Set aside a vacation day or day on the weekend for a closing day. This is when all the paperwork is signed. Gather all of your paperwork the day before and schedule time with each person who must be present: You, the seller, real-estate agents, lenders, closing agent, etc. The final list is particular to the details of your new home. It may seem like a crowded room, but once closing day is done, the keys are handed over and the house is yours!
As you can see, there are multiple steps in the month or months-long closing process. If you have any questions or are looking for guidance in your own home-buying journey, don’t hesitate to drop me a line today!