Buying a new home can be an exciting experience, but it can also be overwhelming. One of the most important steps in the home buying process is the close of escrow. This is the final step in the closing process that ensures everyone did their part. However, the close of escrow can be a confusing and complicated process. Many people are unsure of what it entails and what steps they need to take to achieve it. What is the close of escrow, and what steps do you need to take to achieve it? The close of escrow is when the buyer, seller, and all participating parties have fulfilled their legal responsibilities to one another. This is a regular occurrence that occurs in most real estate transactions. To achieve the close of escrow, there are several steps you need to take:
Provide an earnest money deposit: After you sign a purchase agreement, the buyer supplies an earnest money deposit. This is essentially a type of security deposit that shows the home seller you’re serious about buying the property.
Approve the seller’s disclosures: The Seller’s Disclosure, or the Property Disclosure, is a legal document filled out by the seller. It details the conditions of the property they’re selling and any defects or previous events that occurred there that the buyer should know about.
Complete home appraisals and inspections: Most lenders will require buyers to get a home appraisal of the property before they finalize mortgage loan terms. It helps them determine the value of your home, which impacts your mortgage approval.
Review all escrow documents: There are necessary documents that the buyer and seller should review. They can include the transfer deed, bill of sale, seller’s affidavit, signed mortgage deed, mortgage application, and Closing Disclosure.
Take a final walkthrough of the property: Buyers should examine the home one more time before closing. During the final walkthrough, inspect for any new damages and ensure the seller left everything agreed on.
Meet and sign the closing documents: Closing processes vary by state. However, both the buyer and seller are typically present. A representative of the lender, the closing agent, real estate agent, and legal representation may also attend.
While the close of escrow is a regular occurrence, issues can happen. Delays, title issues, and contingencies are the most common. However, the escrow process supports a fair transaction and allows both parties to protect their interests. At the end, the close of escrow occurs with the finalization of the sale. Overall, it signifies that both parties have fulfilled their responsibilities to one another. In summary, the situation is that the close of escrow is an important step in the home buying process. The complication is that it can be a confusing and complicated process. The question is what is the close of escrow, and what steps do you need to take to achieve it? The answer is that the close of escrow is when the buyer, seller, and all participating parties have fulfilled their legal responsibilities to one another. To achieve the close of escrow, there are several steps you need to take, including providing an earnest money deposit, approving the seller’s disclosures, completing home appraisals and inspections, reviewing all escrow documents, taking a final walkthrough of the property, and meeting and signing the closing documents.