A Guide to Closing: What to Expect When Buying or Selling

A Guide to Closing: What to Expect When Buying or Selling

Whether you’re a buyer or seller, closing day is both the most exciting and stressful step of a real estate transaction.

After looking far and wide for the perfect home and securing funding, buyers are ready to put down roots and start their new life. Meanwhile, sellers finally got the price they were looking for and are ready to move onto their next adventure. All that stands in the way is the closing process.

Unfortunately, closing isn’t as easy as a handshake and wire transfer–and if you’re new to the process, it can be especially stressful to navigate the financial and legal steps required to close a deal.

Fortunately, in this quick guide we’ll help you familiarize yourself with the closing process and let you know what to expect so you can turn the stress to excitement.

What Is The Real Estate Closing Process?

Home closing, also known as settlement, is when the legal transfer of ownership occurs between the buyer and seller.

Most people believe that the closing process is simply when both the buyers and sellers, along with their respective teams, meet to sign all necessary documents, transfer or exchange funds, and hand over the keys to the property. However, it gets a bit more complicated than that.

Key Steps in the Closing Process

The closing process is pretty straightforward, but it involves a lot of steps and often requires the help of multiple professionals, including real estate agents, inspectors, loan providers, and lawyers.

Every home sale is different, but the general closing process looks like this:

• Earnest Money Deposit: After signing the purchase agreement, the buyer will typically submit an earnest money deposit to be held in escrow, showing their commitment to the deal.
• Home Inspection: After an offer has been accepted, buyers will get a home inspection performed to identify any potential issues with the home.
• Title Search & Title Insurance: To ensure there are no liens or potential ownership issues with the home, a title company will perform a title search. After the search, buyers are advised to purchase title insurance to protect themselves from any future claims.
• Reviewing The Closing Disclosure: At least 3 days before closing, buyers receive a closing disclosure, which may outline loan terms, monthly payments, and closing costs, which need careful review.
• Final Walk-Through: Shortly before closing, the buyer conducts a final walk-through to make sure the property is in the agreed-upon condition and any repairs have been completed.
• Signing Documents: On the official closing day, both parties will meet to sign all necessary documents
• Transferring Funds & Receiving The Keys: Once the appropriate monies have been received and the deed is recorded, the buyer receives the keys and becomes the official owner of the home.

By taking these steps, both parties can confidently complete the transaction and make it as stress-free as possible.

Costs Associated with Closing

Once you commit to buying or selling your home, the purchase price isn’t often the final number you pay or receive. Depending on the complexity of the sale, the number of third parties involved, and other factors like commission rates, closing costs can vary extensively.

Buyers can expect to pay 2 to 5% of the purchase price of the home, with closing costs also potentially including fees for loan origination, appraisal, title insurance, escrow, and prepaid expenses like homeowner’s insurance and property taxes.

Sellers, on the other hand, can expect to pay anywhere between 5 to 10% of the sale price of the home, with closing costs covering real estate agent commissions, prorated property taxes, title insurance, and any potential concessions made to the buyer.

How Long Does Closing Take?

On average, the closing process generally takes about 30 to 45 days from the time an offer is accepted to the buyer taking possession of the keys. However, just like the steps and costs of settlement, closing timelines vary based on the terms of the deal.

If there are any issues with the loan approval, appraisal, or home inspection, you may experience some delays. Alternatively, some closings can take less time if inspections are waived or there aren’t any loans involved.

In some cases, the time until closing is a part of negotiations. Sellers may need to close quickly to pay for a new property or buyers may need to move in quickly after selling their home or moving for work, making shorter closings possible.

Simplify Real Estate Closings with Great Florida Homes

As you can tell, there’s no one-size-fits-all closing procedure. Each deal is unique and comes with its own obstacles and twists, which makes it even more important that you have a real estate expert on your side to help you navigate the process quickly and effectively.

At Great Florida Homes, we work with buyers and sellers throughout the entire sale process, including listing your home or starting your home search all the way through closing. With the help of our experienced agents, you can step into your new home or adventure with confidence.

Get in touch with a Great Florida Homes agent today!