You have finally decided on your new home, put in an offer, and the seller has accepted it! You may feel like your home-buying journey is coming to a close, but before it is official, there is a lot of behind-the-scenes work that needs to happen. You’ll want to ensure nothing goes wrong and you do not lose your dream home or new investment property.
This closing process can take anywhere from 30 to 90 days and can be broken down into six steps. Our agents at True Concept Title want new homeowners to feel confident going into closing. Scroll to see a list of six steps that every homebuyer should expect at closing time.
1. Obtaining A Closing Agent
At this point in your home buying journey, you are most likely working with a real estate agent. And now that the seller has accepted your offer, the first step—with your permission— will be for your real estate agent to select a closing agent. You may also choose the closing agent.
The closing agent can be a title company, an escrow company, or a settlement company. True Concept Title is a title company that handles closings nationwide. We oversee the entire closing process, making sure everything happens on time and in the right order so there are no unnecessary delays or issues in the closing of your property.
2. Escrow Agreement
Once you and your real estate agent have selected a closing agent, a contract or escrow agreement will be drafted. A closing agent at True Concept Title will complete and review the escrow agreement for accuracy.
An escrow account will also be set up at this time. The closing agent will put your deposit into the escrow account where the money will remain until closing day.
3. Title Search
The next step in the closing process is to order a title. A title company will then search all public records to identify any potential issues with the title. These issues may include liens against the property or utility easements. If there are any issues, the title company will handle and resolve these issues before the home sale can move forward.
This is extremely important for a new homebuyer as you want to make sure you are the legal owner of the property and there are no claims or judgments against the property before you purchase it.
4. Title Insurance
Once the title search is complete and is clear of any issues, the title company will provide a title insurance policy. Title insurance protects the homeowner (buyer) and the mortgage lender from any financial loss due to a defect in a title to a property. Common claims filed against a title are liens, back taxes, and conflicting wills.
There are two types of title insurance in a home sale: a policy for the buyer (Owner’s policy) and a policy for the mortgage lender (Lender’s policy). If you are obtaining a loan, the bank or lender will require you to purchase a Loan policy, however, beware this policy only protects them. It is recommended that a new homebuyer purchase an Owner’s policy to protect their new property and financial investment.
5. Closing Disclosures
At least three days before closing, your lender or closing agent must provide a Closing Disclosure (CD). The Closing Disclosure provides disclosures that explain the costs of the transactions. This information includes interest rates, monthly payments, and costs to close the loan.
At this time, you or your lender can make changes to the CD. If these changes are significant, you must provide a new form and wait an additional three-business-day waiting period.
Examples of significant changes to the Closing Disclosure can be:
- Changes made to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods).
- Changes the loan product
- Adds a prepayment penalty to the loan
If the changes are not significant, like the ones mentioned above, the changes can be disclosed and revised on a Closing Disclosure form without delaying the closing.
6. Prepare For Closing
As the closing day nears, the closing agent will confirm with all parties a final date, time, and location (even, mobile is an option) for the closing.
On closing day, all the behind-the-scenes work is completed and all the paperwork is in order. You will officially be a new property or home owner!
Close On Your Property with True Concept
Let the closing agents at True Concept Title manage the entire closing process from start to finish. While you are busy packing, transferring utilities, and coordinating movers our professional, full-service title and closing company is handling the closing process.
Are you ready to close on your new property? Call True Concept Title at 813-263-7168 and let us handle the rest! We’re trusted by homeowners, banks, mortgage loan originators, and other real estate experts nationwide; the best work with the best.