Managing to buy a new home or finally sell one in New York can be extremely exciting. The final steps of the process, however, can feel like a drag, especially if you’re not quite sure what to expect. Keep reading to learn about what happens during a real estate closing process.
What is a real estate closing?
A real estate closing is the meeting where ownership of the property changes hands. It’s also when all of the financial transactions related to the property sale are finalized.
Who is involved in a real estate closing?
A typical real estate closing will include the buyer, the seller and their respective attorneys. In many cases, it also involves a title company representative and other individuals, such as home inspectors or mortgage lenders.
The specific steps that take place during a real estate closing vary depending on the individual circumstances. However, most closings contain at least some common steps.
Transfer of funds into escrow
A real estate closing begins when the buyer pays funds into an escrow account. These funds are held until they’re needed during the actual transaction. This is important because it helps assure the seller that they’ll get paid in full for the property.
A title search
This step ensures that the seller is actually allowed to sell his or her home. It also ensures that there are no liens on the property, such as a mortgage. A title search is typically performed by a title company representative.
Review of the closing documents
Documents such as the sales agreement, deeds and mortgages are then reviewed to ensure that they’re accurate. They may also be modified at this time if there is a mistake or missing information. This step can take place either before or after funding occurs.
Executing closing documents
Once all of the parties have agreed that everything looks good, the parties execute the closing documents. This means that the parties officially sign them, and they become legally binding.
Whether you’re selling or buying a home, it’s important to know what will happen during the closing process. Being adequately prepared during closing can help you have a smooth process and keep you from feeling overwhelmed.