Home Closing Process

After your offer on a home has been accepted the escrow process begins. While you’re busy packing your belongings and getting excited about all the wonderful things you’ll do in your new home, your agent will be hard at work on your behalf. Counselor REALTORS® works with your mortgage broker, appraiser, home inspectors, title company, and closers to make sure all the conditions in the purchase contract are met and that the home is in good standing for you.

Appraisal, Inspection, & Lending

During escrow, all of the conditions and contingencies outlined in your purchase contract will be processed. If you listed an appraisal, inspection, or due diligence, now is the time they will be conducted. Usually, there are deadlines within the purchase contract that dictate when you will have each service completed. If the appraisal or inspections can’t be scheduled early enough or complete by the listed date, your agent will ask the sellers for an extension to complete that particular service. In most cases, reasonable extension requests are accepted.

Your lender will be watching to make sure the home you want to purchase appraises at a value high enough for them to justify the loan terms outlined in your pre-approval and (depending on what kind of financing you’re getting) to make sure that the house passes inspection. Your agent is experienced in this process and many REALTORS® are aware of what popular lending programs are looking for, so during the home search they will help you choose a property that appears to meet these terms before you make an offer. If the property you want to buy meets all the requirements and your credit, income, and other information is approved, your financing will move forward.

Title Company & Closer

The title company will review the title history of the property. They will work to uncover any existing liens or other title issues. The hope is the title is free and clear and will pass from the seller to the buyer without any additional work, but sometimes the title search uncovers information that has to be dealt with before closing can take place. Once the title search comes back clear, the title company will issue title insurance that protects you in the event any title issues surface after the sale that existed before you took possession such as unpaid taxes, liens, or other legal issues.

After the appraiser, inspectors, title company, and the lender have all completed their processes, all the pertinent documents are sent to the closer. This is the person who will compile all the necessary paperwork and disclosures to review with you at closing and be sure you understand (again) everything you’re signing before you finalize the sale and take possession of the property.

Home Owners Insurance

Before closing, you’ll be asked to contact the insurance company of your choice and establish home owners insurance as well as any other required insurance (like flood insurance). If you are buying the property with a loan, your lender will require the insurance is in place before you take possession and will be active upon closing. That way the property is covered at all time.

Home Warranties

Sometimes you may opt to purchase (or the seller may offer) a home warranty to run alongside your standard home insurance for a set period. Home warranties come in many different forms but usually help the buyer cover unexpected costs should something major breakdown during the term of the warranty. This can include things that fail even due to normal wear and tear like appliances, heating and air conditioning, and plumbing or electrical systems.

Most warranties include repair (or replacement if it can’t be fixed) without requiring you to personally pay the cost (which can be quite significant depending on the issue). This is an optional warranty, so if it’s important to you and not offered by the seller, ask your REALTOR® how you can purchase it for yourself before closing.

Have more questions about the home closing process in the Twin Cities / Minnesota? Contact Counselor Realty for more information today—we would love to help!

 

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