When you are purchasing a new home, the final step in the home buying process is generally closing. It is important to know what steps need to be met before closing, in order to ensure that all legal bases are covered when finalizing the sale. The following are some steps to take before closing on a real estate deal.
Escrow accounts
First, an escrow account should be opened. These accounts are held by a neutral party on behalf of the buyer and seller. This neutral party holds on to any finances and documents related to the sale. Once all legal and procedural formalities have concluded, the finances included in the escrow account along with any documents are released to the seller and buyer.
Title search and insurance
It is important to perform a title search and obtain title insurance before signing on the dotted line. Title searches examine public records to confirm that the seller has the legal right to sell the property. If anyone else has a claim on the property these claims must be resolved before the sale can be complete.
Title insurance protects buyers from being financially responsible for any losses associated with title defects, liens or encumbrances.
Resolve contingencies and perform a final walk through
Most real estate offers have certain contingencies that must be met before the sale can be complete. Some examples of contingencies include obtaining a mortgage, having a home inspection and pest inspection completed to ensure there is no damage to the structure of the home and having the seller complete any agreed-upon repairs. In what is referred to as “active approval,” these contingencies once met must be taken off the offer in writing by specified dates prior to finalizing the sale. A final walkthrough before closing can ensure the property is in the condition agreed upon.
Review all paperwork
There is a lot of paperwork that comes with selling a home. As daunting as it may seem, it is important to review this paperwork. An attorney can help you understand terms in the documents that you are unfamiliar with.
Real estate attorneys can be a useful resource
If these steps seem overwhelming to you, you are not alone. Many people in Mississippi going through the home buying process for the first time may not know what to expect. It is important to seek legal advice for anything you do not understand or even just to ensure all proper steps are taken, so there are no surprises when it comes time to close on the deal.