After attending countless open houses and submitting multiple different offers which were denied, you have finally found your dream home and your offer was accepted. You may think that at this point, it’s a done deal that all the stress of finding a home is over. However, the closing process for real estate is quite complex and involves multiple different steps to be completed before you can officially call the home yours and move in.
Dieter Dammeier, a practicing attorney in Rancho Cucamonga, California, with nearly 25 years of experience at every administrative and judicial level, shares the different steps involved in closing real estate.
Open an Escrow Account
Escrow or title agents serve as a neutral third party between the other parties involved in a real estate transaction. An escrow agreement protects both the buyer and the seller from being cheated during the real estate closing process, which can span over multiple weeks and months, notes Dieter Dammeier.
Escrow Agents hold onto the money and documents involved in the transaction until the home sale has been settled, ensuring a secure transaction. Once the sale has been settled, the money and documents are released back to the buyer and the seller.
Hire an Attorney
The best way to protect yourself from losing money or being pushed into a sale is to hire an attorney to help you throughout the closing process, says Dieter Dammeier. The language and formats of documents involved in real estate transactions can be confusing for the average person, so having a professional to help you navigate this process is vital. An attorney can pinpoint any potential problems that may be in the paperwork and help you deal with these problems appropriately.
Complete a Title Search and Obtain Insurance
After you hire an attorney, your attorney can conduct a title search of the property at the property registry office. This will provide you with all of the information relating to the property, including all records and documents that may be relevant. These records will list every person or party that has ever had ownership of the property. By conducting a title search, you will protect yourself from any potential liabilities, says Dieter Dammeier.
As long as the title search doesn’t reveal any questionable aspects, the sale can continue. From there, you would want to obtain title insurance. This protects the holder from potential financial loss due to defects in a title to a property. Title insurance also protects owners of real estate and lenders from losses or damages from liens, encumbrances, or defects in the ownership of the property.
Complete a Home and Pest Inspection
The best course of action before completing the final steps of the real estate closing process is to hire a third-party inspector to complete a detailed, thorough home inspection. These inspections can uncover potential defects inside the house or on the property that may impact the completion of the sale for the previously agreed-upon offer. These issues may include but are not limited to structural problems, nonworking appliances, and elements that could violate building codes. You will also need to get a separate pest inspection completed.
Depending what the inspections uncover, you will have the opportunity to back out of the sale or renegotiate the deal. In certain cases, mortgage companies require a inspections to be completed and the defects to be dealt with prior to proceeding with the closing.
Dieter Dammeier on Final Steps
Once these steps have been completed, you are ready to complete the minor details. You will need to renegotiate the purchase contract (if necessary), get homeowner’s insurance, do a final walkthrough, and, finally, sign the papers to take over ownership.
While the real estate process can be long and complex, you can have experts available to help you every step of the way, says Dieter Dammeier.