Are You Unsure How Closing On A Home Works? Here's 11 Steps From Offer To The Closing Table.

The closing process for real estate transactions can be an intimidating one to understand. Many details are involved and multiple parties need to sign off for everything to go smoothly. It is the final stage of the home-buying process when the buyer, sellers, lenders, and other necessary parties come together to finalize all contracts and transfer property ownership from sellers to buyers. This blog post will explain what happens during a real estate closing so that you feel prepared for yours.

Step 1: Research is key when buying a home

Before you even start looking at homes, make sure you have a general idea of how much you can afford to spend on homes for sale in Long Beach. You can do this by talking to a financial advisor and creating a budget to determine what you can afford. This can help you avoid being pressured into making an impulsive decision.

Step 2: Receive Your Loan Commitment Letter

Your lender will give you a loan commitment letter before shopping for a loan. This is the lender’s offer to provide you with a loan. If you accept the terms in the loan commitment letter, you will receive your loan disbursement 10 days before your closing date.

Step 3: Perform Due Diligence

When you receive your initial offer to purchase the home, you have the right to walk away from the offer. This is called due diligence and allows you to meet with the owners, the title company, and the realtor to ensure everything checks out.

Step 4: Contract Confirmation and Title Search

You should have received an offer to purchase a contract from the seller. If you did, you should confirm and sign this contract as soon as possible. It will be the first thing you must bring to the closing table. You will also need a title search report. With this, you will be able to determine if the title to the property is clear and if any liens need to be paid off before the closing date.

Step 5: Earnest Money Deposit and Repayment

During your contract negotiations with the sellers, you’ll need to decide if you want to include an earnest money deposit. You will receive a receipt for the earnest money deposit. The title company will hold this money until closing day.

Step 6: Negotiate Final Contracts with Seller

The time has finally come to negotiate final contracts with the sellers. This is where you and the seller will decide on the final terms of the sale. You will need to consider closing costs, repairs before closing, price, and closing date.

Step 7: Record of Receipt and Final Settling (aka “RSF”)

You will have negotiated final contracts with the seller, and you will have received the record of receipt from the seller. This is the official payment record that the seller will need to sign and give back to you on closing day for you to receive the keys and sign off on the record of settling (RSF).

Step 8: Clearing Disposition, Covenants, Conditions, and Repairs (CCCR)

With your record of receipt in hand, you will now want to clear the CCCR. This is when you take the receiving record and compare it to the seller’s list of the property’s conditions, covenants, and defects (CCCD). This is where you will want to go through all the details listed in the seller’s CCDC report. You will have a limited time to request a repair, so it’s best to take care of these as soon as possible.

Step 9: Change of Ownership and Possession

You will now need to change the ownership and possession of the property. This is where you will need to fill out a change of ownership form and have the sellers sign off on it.

Step 10: Completing the Record of Repurchase (ROR) Disclosure Information

You must fill out the record of repurchase (ROR) disclosure information. This form is intended to report any issues in the property that were overlooked during the CCCR process. This covers problems with the house, the yard, and the appliances. It is critical that you reveal everything so that neither party is surprised.

Step 11: Take-Out Mortgage Disclosures

After completing your ROR, take-out mortgage disclosures will be required. This form will inform you of any additional costs you will be responsible for once the closing process is completed. These costs may include property taxes, homeowners association fees, and other due fees. Your lender will give you this form towards the end of the closing process, so don’t be alarmed if you don’t receive it immediately.

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