Everything You Need to Know about the Closing Process
The real estate closing process refers to all the necessary paperwork needed to complete the transaction of real estate property. It is typically held in an official setting (the escrowee’s office, for instance) sometimes with both the buyer and the seller at the same table while at other times, they complete their paperwork separately. There are several steps required to be followed by a seller in Montana during the process.
Let’s take a look at them.
The Real Estate Closing Process – All You Need to Know About It
1. Open an Account Held by a Third Party
There are a lot of things that have to happen to complete a home sale. Of course, money exchanging hands is one of the most sensitive of these things. The best way to prevent either the seller or the buyer from getting ripped off or run into legal issues is to have a neutral third party hold all the money and all the documents related to the transaction until everything has been cleared and settled.
2. Do a Title Search and Get Insurance
A title search and title insurance provide peace of mind and a legal safeguard so that when you sell a property, no one else can try to claim it as theirs later. A relative who was left out of a will or a tax collector who wasn’t (or thinks he wasn’t) paid are just two examples that can ruin your closing process. A title officer is a person who performs a title search to make sure there are no issues with the title (that is, third-party claims to a property that could call into question or invalidate your ownership). If there are, these problems will need to be resolved before you can make the sale.
3. Find a Real Estate Attorney
This is an optional but recommended step if you want to get a professional legal opinion on your closing documents. An experienced real estate attorney doesn’t just understand all the terms but also knows exactly where to look for potential problems.
4. Negotiate Closing Costs
It goes without saying that the escrow company can’t be expected to provide its services for free. However, you should know that many companies in this industry take advantage of consumers’ lack of knowledge and boost their profit by charging junk fees. Though there is some debate over what is considered a junk fee and what is not, there are some items to look out for: administrative fees, appraisal review fees, email fees, processing fees and settlement fees.
If you’re willing to stand your ground or have a real estate agent helping you out, you can usually get these fees eliminated or at least reduced. The fees for legitimate closing services can be inflated, too, so talk to your real estate agent about what they think is best.
5. Sign the Documents
Obviously, one of the most critical steps of closing is signing the paperwork. There will probably a lot of pages to go through. However intimidating it may seem, don’t give in to the pressure of signing everything quickly. Read every page carefully and make sure you understand every single line.
6. After the Closing
The closing process is considered complete after the sale proceeds have been paid to your and the deed (and the buyer’s mortgage if there is one) are placed for recording with the county recorder of deeds. After that, all the transfer documents have to be given to the buyer.
When the closing process is completed, you are no longer the owner of the home. Unless your contract specifies otherwise, you have to relinquish possession and give the buyer all the keys or access devices to your old home. Be sure you have your new home or living underway so that you don’t have to make last minute arrangements on where to stay.
The closing process is simpler for the seller, and it helps to have a great selling agent on your team who really knows what they are doing. Make sure that you read through everything carefully and that you comply with the clauses of the contract. If you have questions on what it might mean for you to sell your home, give us a call at (406) 298-5888, we would love to help you get started with that process, and maybe even help you find your new dream home!