For those of you who are new to the real estate game, as in buying or selling your first home, you may have a general idea of what closing is. But it helps significantly to really understand the entire process so you know what exactly you’re getting into if, for example, you’re about to make an offer on that Indian Wells real estate or property in La Quinta that you have your eye on. So here is a brief summary of the basics, so that you know exactly what “closing escrow” means to everyone involved.
Some people refer to closing as the “settlement” of the deal, which is exactly the point in time when the deal is set in stone—the mortgage is executed and the title is transferred to the buyer. At this point, the buyer should be fully aware of all the associated costs that incur with closing. Once you’re approved for a mortgage, the lender has three days to provide you with a “Good Faith Estimate” of all the associated costs. You should also receive an outline of the closing process, whether you’re buying the home you’ve always dreamed of or selling your Indian Wells real estate.
When it comes to closing, timing is essential. Once the seller agrees to accept an offer, the countdown begins. If you’re a buyer, by this time, you should have enlisted a professional to execute the rest of this process. You can find a reputable settlement agent through your real estate professional, or in many areas, the process will be executed by a real estate attorney, or by your escrow company or title company. Whoever handles the settlement will ensure that your down payment is deposited into the escrow account until the deal is officially done.
From here, the preliminary title work commences. In this phase, your title company will search public records for any information related to the property’s title. This is done to ensure that there are no issues related to the property, such as outstanding taxes or a judgment on the property so that the buyer is not left responsible for conditions they were unaware of before closing. Once this phase is cleared, a HUD-1 Settlement Statement, which outlines all associated costs for both the buyer and seller, is completed.
While there are typically post-closing details that are attended to, once you close, the property is yours (if you’re the buyer, of course). It may seem like you’re signing your life away, but once you close, you’ll be the proud owner of that dream property in La Quinta.
image: home.howstuffworks.com