In my last post we talked about inspections and appraisals. In this post we’ll talk about the closing process and what to expect.
Closing on the sale of a property typically takes about 30 to 60 days from when the offer is accepted. During this time, two different teams (in addition to your real estate agent, who will be keeping it all on track) will be working to get your transaction to the closing table:
1. Title: Most closings in Florida are processed by a title company. The title company plays several very important roles in your home purchase:
- They ensure that the title to the property is “free and clear”, meaning your ownership of the property will be guaranteed and insured through title insurance.
- They normally hold and disburse all of the money as the escrow agent. They hold your earnest money deposit and eventually your down payment and closing costs, as well as the funds loaned to you by your lender, and then they will use those funds to pay off the seller’s old mortgage, and pay any taxes, commissions, and fees that are due, before releasing the balance to the seller.
- They take care of all of the paperwork and signing/notarizing of documents.
2. Lender: Obviously, your mortgage lenders primary job is to loan you some money! In the weeks leading up to closing, be prepared to supply a lot of documents (such as tax returns, bank statements, and pay stubs) to your mortgage lender. These documents are reviewed for thoroughness, completeness and accuracy by the lender’s underwriting team. Once all of the i’s are dotted and t’s are crossed, and your mortgage has been fully approved by underwriting, the best words you can hear are “clear to close”. You’re almost at the finish line!
Once your title work is done, and your mortgage is clear to close, a date and time for your closing will be set. Closings often take place at the title company (but they can also be done at an attorney’s office, a real estate office, or even at your home or work with a mobile notary or closing agent). There is a also a recent trend towards remote closings using videoconferencing.
A couple of days before your closing, your closing agent will send you a final draft of your settlement statement that shows all of the financial details. This will show the balance of your purchase price, plus any closing costs or mortgage origination fees, less your deposit and any credits or concessions from the seller. The bottom line is your required “cash to close” – this is the final amount you’ll need to wire to the title company prior to closing.
Once at the closing table you will be signing and reviewing several documents, including a hard copy of your mortgage application, settlement statement, mortgage, promissory note, several disclosures and legal notices, and of course, the deed to your new home. The closing agent will explain each document as you sign, and your real estate agent is often there to answer any last minute questions.
Once all of the documents are reviewed and signed and funds have been received from you and your lender, you get the keys and the seller and other parties receive their money.
Congratulations! You are the proud owner of your first home! Let the DIY projects begin!
Rob Reed is a REALTOR in St Petersburg, FL that specializes in working with first time home buyers.
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