What happens after the offer is accepted?
The closing process or escrow begins when your offer is accepted and ends when you move in.
The Closing Attorney/Escrow Agent
Real estate closing attorneys are neutral third parties who assist in handling:
- Title and Escrow work
- Other paperwork related to the home purchase.
Real estate attorneys collect and hold documents and funds in trust for all parties until the transaction is complete.
Closing attorneys enlist title companies to provide insurance that a title is satisfactorily clear of liens, judgments, other encumbrances or title defects.
Contingencies let you terminate your purchase offer without penalty if certain conditions are not met.
Common Types of Contingencies
- A mortgage contingency
- An inspection contingency
- An appraisal contingency
- A title contingency
- A walk-through contingency
Each contingency may have its own time limit, the limits are brief such as, one week to apply for a mortgage or 10 days to have the home inspected.
It’s your responsibility to make sure contingencies are satisfied within the time limits, not the seller, but work with a realtor to help you manage this process, if you miss deadlines you probably won’t be able to legally enforce that contingency, make sure you keep on top of things.
Inspections are sometimes optional but very important and help buyers get a better understanding of the ins and outs of a property being purchased.
Inspections May Include
- Checks for termites
- Water leaks
- Compliance with housing codes
Other Things You May Need to Consider Are
- Surveys to determine boundaries.
- Appraisals to determine value for lenders.
- Title reviews and structural inspections.
At the end of the home inspection, you will receive a report and summary. Any significant defects and issues will be brought to your attention at this time.
Feel free to be present during the inspection and ask questions on anything you’re concerned about.
Take this is your opportunity to ask the seller to make any repairs as a condition of the sale.
Clearing the Title and Ordering Insurance
Once the title is determined to be clear by the title company, title insurance is issued.
This protects both buyers and lenders from possible future disputes over the property.
Other Protections Include
- Homeowners insurance —provides fire theft and liability coverage.
Homeowners policies are required by lenders and often cover an extensive range of personal items.
- Flood insurance —generally required in high-risk flood-prone areas.
This insurance is issued by the federal government.
- Home warranties —provides the buyer with peace of mind after the closing.
Knowing that there is an insurance company that will offset or cover the cost of unforeseen defects and repairs.
- Mortgage insurance —certain loan types may require an insurance policy which protects the lenders against an unexpected default of a mortgage loan.
The Final Walk Through
This is your last chance to view the property and confirm that the condition has not significantly changed since the sale agreement was signed.
Transfer of Ownership
The settlement, sometimes called the closing is the final step, when the ownership of the home officially transfers, the buyer receives the keys and the seller receives payment.