If you’ve ever bought a home, you know that the process can take months and that there are many more steps involved than merely the final signing of the paperwork (which, in and of itself, is quite significant). One of the processes that you should understand is real estate closing, which can seem like a baffling process with all its paperwork and negotiations.
It Begins With an Escrow Account
According to Investopedia, the first step in the closing process is opening an escrow account, which is a place where money is held by a third party who is unrelated to the buyer or the seller. The process of completing a home sale can take several weeks, and an escrow account helps ensure the transaction is secure and safe for everyone involved.
According to further details from Investopedia, the second step for most future homeowners is a title search, which may require title insurance.
“[A title search is] a legal safeguard so that when you buy a property, no one else can try to claim it as theirs later, be it a spurned relative who was left out of a will or a tax collecting agency which wasn’t paid its dues.”
Along with a title search, a home buyer may also hire an attorney. Some locations require a lawyer’s involvement in the closing process but getting a lawyer’s help is optional in other places. Paperwork for most real estate transactions is lengthy and complex, but the information is “old hat” to an experienced real estate lawyer.
The Negotiation Process and Closing Costs
Having a seller accept a prospective buyer’s bid on a house isn’t the end of the story when it comes to negotiations. Closing costs are generally paid for by the buyer, but there are some costs that the seller will need to cover, too.
One of the costs a seller will usually pay is the fee paid to the real estate agent, but the negotiation process may also include a request that the seller pays some of the other closing costs, too. Fees a seller will pay for will usually show up as “seller credits” on the loan estimate.
Closing Fees That Buyers Normally Pay
Closing costs can vary in scope and amount, and it’s important to understand all the possible fees you’ll need to pay once your home buying experience is underway. According to an article from The Motley Fool, closing costs can add anywhere from a few to several thousand dollars to the final price of the house:
“Closing costs for homebuyers aren’t cheap — typically ranging from 2% to 5% of the sale price. In other words, if you buy a $200,000 house, you can expect closing costs of between $4,000 and $10,000.”
Some of the costs you may need to pay as a buyer include attorney’s fees, fees to run a credit report, loan origination fees, and appraisal fees. You may even need to pay survey fees, costs related to the escrow account, and underwriting fees, which are the costs associated with loan application evaluation.
Are You Thinking About Buying a House?
Are you considering a home purchase? Do you have questions about the selling process? Would you like assistance from an experienced real estate lawyer? Contact Suburban Legal Group for more information.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.