The Ten Steps of a Real Estate Closing
“Closing” implies a quick, one-time event. But in reality, a real estate closing is a process. If any step in this process goes wrong, the entire transaction could be at risk.
A good St. Petersburg real estate lawyer is thoroughly prepared for every step of this process, so buyers and sellers complete their real estate transactions with confidence.
Title Search and Insurance
A title search and title insurance provide peace of mind and a legal safeguard. They ensure that no one else can try to claim it later when you buy a property, and the property is free of liens and other legal encumbrances.
Title insurance is indemnity insurance that protects the holder from financial loss sustained from defects in a title to a property. It protects real estate owners and lenders against loss or damage stemming from liens, encumbrances, or title defects.
Negotiate Closing Costs
These costs include home and pest inspections, which are crucial to prevent you from buying a property with hidden and costly problems but many such services take advantage of consumers’ ignorance by charging high fees. Even fees for legitimate closing services can be inflated.
Junk fees are charges that a lender imposes at the closing of a mortgage and are often unexpected by the borrower and not clearly explained by the lender. Junk fees include administrative fees, application review fees, appraisal review fees, ancillary fees, processing fees, and settlement fees.
Complete the Home Inspection
A physical home inspection is necessary to discover any potential problems with the property and to get a look at its surroundings. You’ll have an opportunity to back out of the deal or ask the seller to fix it if you find a serious problem with the home during the inspection. You can also have the seller pay you to fix it if your purchase offer includes a home inspection contingency.
Pest Inspection
A pest inspection is separate from a home inspection. It involves a specialist ensuring that your home doesn’t have any wood-destroying insects such as termites or carpenter ants. Pests can be devastating for properties made primarily of wooden material. Many mortgage companies mandate that even minor pest issues must be fixed before you can close the deal.
Renegotiate the Offer
You may want to renegotiate the price to reflect the cost of any necessary repairs revealed by inspections even if your purchase offer has already been accepted. You could also keep the purchase price the same but try to get the seller to pay for repairs. There’s no harm in asking even if you’re purchasing the property “as is.”
Lock in the Interest Rate
Interest rates including those offered on the mortgage can be volatile and subject to change. Rates are subject to multiple factors such as geographic region, property type, the type of loan applied for, and the applicant’s credit score.
It’s advisable to lock in the interest rate for the loan in advance if possible. Even a 0.25 percent rate hike can significantly increase your monthly payments and the amount of time it takes to repay the mortgage.
Remove Contingencies
As the finish line approaches, a St. Petersburg real estate lawyer must remove certain contingencies. Your real estate offer should be contingent upon five issues:
- Obtaining financing at an interest rate that doesn’t exceed what you can afford,
- The home inspection doesn’t reveal any significant problems with the home,
- The seller fully discloses any known issues with the home,
- The pest inspection doesn’t show any major infestations or damage to the home, and
- The seller completes any agreed-upon repairs.
Such contingencies must be removed in writing by specific dates stated in your purchase offer, a process known as active approval.
Meet Funding Requirements
You most likely deposited earnest money when you signed the purchase agreement. Earnest money is a deposit made to a seller indicating the buyer’s good faith, seriousness, and genuine interest in the property transaction. The earnest money goes to the seller as compensation if the buyer backs out. The money is returned to the buyer if the seller backs out.
Final Walk-Through
One of the last steps before you sign your closing papers should be to look over the property one last time. You’ll want to make sure that no damage has occurred since your last home inspection.
Understand the Paperwork
You may feel pressured by people such as the notary or the mortgage lender who are waiting for you to sign your papers but read each page carefully. The fine print can have a major impact for years to come.
Rely on a Diligent Pinellas County Lawyer
Real estate closings are complex matters. For a confidential consultation with an experienced elder law attorney in Bradenton, contact Drude Tomori Law. The sooner you reach out to us, the sooner we start working for you.
