Home
Sellers |
Home
Buyers |
1.
Select an escrow agent.
One
of the parties selects an escrow
agent. The escrow agent will collect
the necessary documentation from
each side and will conduct the closing. |
1.
Deposit earnest money funds.
Earnest
money funds are deposited according
to instructions, which include who
will hold the deposit, whether interest
is to be accrued, and conditions
of release. These funds are applied
to the down payment at closing. |
2.
Assemble condo or home owners association
(HOA) documents.
Sellers
who live in condos or in a neighborhood
subject to an HOA must provide financial
statements and recent reports to
the buyer for review. |
2.
Make the final loan application.
If
interest rates are falling and more
home owners are refinancing, additional
time may be needed to obtain a mortgage
commitment. If the property is being
financed with a VA, FHA, or other
government-backed loan, it will
be necessary to obtain copies of
correctly filed building permits
for all remodeling or additions
done since the original construction.
Decisions about locking in interest
rates can be made at any time after
a contract is ratified. |
3.
Order a preliminary title report.
A
title search examines all public
records to determine any defects
in the chain of title; in other
words, to confirm that the seller
actually owns the property and has
the right to transfer ownership. |
3.
Order the home appraisal.
Lenders
require an appraisal before committing
to a loan. Appraisers compare the
features and condition of a home
to similar properties to arrive
at a dollar figure for its value. |
4.
Request a satisfaction letter from
present lender.
Total
amount due on any existing mortgages
must be provided in advance of settlement. |
4.
Arrange the property survey.
A
survey determines the boundaries
of the property, its location, and
the size and shape of any buildings
on the lot. The survey also identifies
any existing easements or encroachments. |
5.
Coordinate home appraisal and inspections.
Arrangements
for access to the property must
be made for the lender's appraisal
and any inspections as specified
in the contract. |
5.
Order inspections.
Inspections
may include those for home condition,
radon, lead, earthquake, and termite
infestations. Inspections should
be ordered as soon as the contract
is ratified so there is time to
remedy any problems or renegotiate
terms. REALTORS® have established
relationships with inspectors and
contractors to help ensure that
their transactions get priority
in busy times. |
6.
Arrange final utility readings and
payments.
When
bills are prepaid, payments will
be prorated at settlement between
buyer and seller. |
6.
Verify employment and financial
information.
Lenders
will require buyers to verify employment
and financials before committing
to the loan to ensure that there
have not been significant changes
since the process began. |
7.
Obtain home warranty policy (if
applicable).
If
a seller has offered a home warranty
policy, he or she must obtain this
policy before closing. |
7.
Purchase homeowners' and hazard
insurance.
Homeowners'
and hazard insurance is required
by lenders; in some areas, flood
insurance is also required. |
8.
Complete repairs.
If
the sellers have agreed to make
repairs as a result of a home inspection,
these must be completed. If repairs
require a building permit, sellers
must apply for one as soon as possible,
because this could delay closing. |
8.
Obtain title insurance.
Title
insurance can help ensure that title
defects will not make a property
unsaleable in the future because
of:
- Forged
documents
- Undisclosed
heirs to the property
- Mistaken
legal interpretations of wills
or trusts
- Misfiled
documents — deeds, liens,
mortgage satisfaction documents
- Confusion
caused by similarities in names
- Incorrect
marital status
- Mental
incompetence
|
9.
Have an attorney prepare the deed.
The
deed is the document by which the
owner transfers title to the property. |
9.
Secure a loan commitment.
Lender
notifies escrow agent of commitment
and confirms settlement date. |
10.
Arrange for payment of transfer
taxes.
Most
states require a tax on transfer
of property. This expense is most
often the responsibility of the
seller. Cities and local municipalities
may also charge transfer taxes. |
10.
Transfer utility accounts.
Utilities
should be transferred into the buyers'
names as of the date of settlement. |
 |
11.
Complete the final walkthrough.
Buyers
walk through the property with their
REALTOR® shortly before closing
to ensure that the property is being
delivered in the condition agreed
to in the contract. |
