What to Know About the Closing Process

Posted by Justin Havre on Monday, February 3rd, 2020 at 8:03am.

How to Handle Your Home Buying EscrowThe home closing process is the tail end of a hectic journey for a Roxboro home buyer. From the pre-qualification letter to the final acceptance of the offer, it's easy to miss a step during escrow. We'll look at how long the process lasts, what affects the outcome, and why buyers will want to consult a real estate agent before agreeing to anything final.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

A Time of Examination

There's a reason why a home isn't sold the day the buyer makes the offer, and it's so both parties have time to examine the details of the sale. On average, escrow lasts for about a month, though this time period is much more of a suggestion than a rule. Now is the time for buyers and sellers alike to ensure their contingency requests are being fulfilled. A seller will confirm the buyer's financing has come through in the same way a buyer will confirm the seller has fixed the fence as requested.

Buyers will typically work with a lawyer as well, and allow them to oversee the transfer of the deed and the funds. If it turns out the ownership of the property is being contested by an ex-spouse, the agent will be in charge of organizing the details if the sale is cancelled. Buyers are highly encouraged to communicate with everyone during this time. It's the buyers who have to feel entirely comfortable with the property before handing over the money, so it helps to have a strong relationship with everyone from the title employees to the real estate agent to the lawyer.

Lender Needs

During the closing process, the lender will typically require buyers to take care of the following expenses:

  • Insurance
  • Taxes
  • Interest
  • Payments

Every lender will have their own rules for how home buyers are meant to pay for these costs. They may ask the buyer to roll certain expenses into a single lump sum (sometimes called mortgage escrow), and then pay out on behalf of the buyer. Even if the lender doesn't require this of their clients though, it helps for buyers to be as proactive as possible—especially during this time. Lenders have been known to back out of their agreement at the last possible minute, so buyers should do everything in their power to take the lead.

Starting Over

As painful as it can be sometimes, buyers may need to call off the sale if the closing process isn't going the way they expected it to. A poorly maintained electrical system, a property division dispute, a failing septic tank: a title company or home inspector could turn up any number of deal-breakers within the month.

Buyers are highly encouraged to work with sellers whenever possible. The end of the escrow period is also a great time to catch a real estate lawyer up on the specifics of the sale. If there are any discrepancies that could lead to trouble somewhere down the line, the lawyer may be able to put their finger on the anomalies that home buyers missed. While canceling the sale and starting over is undoubtedly frustrating, it's also necessary when the risks of buying vastly outweigh the rewards.

Escrow is a time for everyone to go over the numbers and details of each step of the sale. If there are any problems along the way, home buyers need to be aware in order to move forward with both eyes open.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

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