It is exciting to buy a home in Chapel Hill, whether it is your starter home, your forever home or you are downsizing. Once the offer is made and accepted, the closing process will start. There are five basic steps in the residential real estate closing process.
Five steps in the real estate closing process
The first step is to open an escrow account. This is a financial account held by a third party. All money and documents related to the sale are held in the escrow account. After closing is complete, the funds and documents in the escrow account are transferred to the seller and buyer, respectively.
The second step is to perform a title search. Public records are examined in a title search to ensure no other party has a claim to the property. If a third-party claim is uncovered, it must be resolved before the sale can be complete.
The third step is to negotiate closing costs. You may need to have a home inspection and pest inspection. This can be costly. Even known closing service fees such as administrative fees, appraisal review fees and processing fees, among others, can be costly.
The fourth step is to have the home inspected and get a pest inspection. This can uncover problems with the property that may need to be fixed before the sale can be completed. If a serious problem is uncovered, the buyer may be able to back out of the sale. Often, the parties will negotiate for the seller to pay for these problems with the property.
The fifth step is to take care of any contingencies. You may need to secure financing at a certain interest rate. Problems with the home must be fixed, all before the closing process can be completed. A final walk-through ensures these contingencies are met.
These are the basic steps in the closing process. Once they are complete, you will sit down with the title company and complete the final paperwork necessary to complete the home-selling process.
Should I hire an attorney?
Hiring an attorney is a personal decision. The real estate closing process has many facets that can be difficult to understand. An attorney can educate their clients and deal with potential problems that may arise during the closing process.