Congratulations! You’ve found a home that “checks all the boxes” and you’re ready for the next steps. Closing a real estate deal the right way will make the process more efficient and less stressful — giving you the structure and confidence you need in your home buying journey. Before you know it, the keys to your new home will be in your happy hands.
To make sure you are closing a real estate the right way, follow these seven steps:
- Make the Offer on the Home
Depending on the market, the selling price may be closer (or farther away) from the asking price. Be aware of the competitiveness of the neighborhood. Make an offer that seems fair to you and don’t lowball it if you truly want the house. Also, follow these best practices for making an offer:
- Make sure any handwritten documents are legible
- Provide several methods of contact so they can reach you quickly including best times
- Include a time frame with the desired move in (with sufficient time to be able to pay the selling price)
- Include the specific amount of the down payment
- Make sure to specify any conditions of the sale
Choose a respected, experienced home inspector and set up an appointment. Taking this step can save you a lot of money and hassle down the road. The inspector will give you a thorough report to let you know what type (if any) of repairs need to be completed. This report can also give you leverage in negotiations, potentially changing the price of the final contract. The cost of the inspection is an investment in your financial future. You don’t want to get surprised with major unexpected repair projects down the line.
Once the inspection comes back, alterations in the sale price may need to be made. Know, in the end, this is a transaction for both the buyer and the seller — extreme “lowballing” may end up making you lose a home you really want. Be smart and be fair, and make sure the end price is something you can afford.
Once you and the seller agree on the price, it is time to sign the contract for the sale. Be sure that you understand the full document including any conditions of the sale of the home. It is recommended to get your lawyer or real estate agent to review the contract before you sign it. The excitement and emotions of buying a home may cause you to overlook something. Having it double-checked by professionals is in your best interest.
To make sure your home is worth the amount in the contract your financial institution will require an appraisal. If for some reason the house doesn’t appraise for the asking price, you can either try to renegotiate the deal or cancel the contract altogether. Working with the real estate agent prior to signing the contract will help this part of the process go more smoothly and make it less likely to get a big (bad) surprise for the appraisal.
The next step in closing a real estate deal the right way is to obtain approval for the loan. Many potential homebuyers may have received pre-approval from their lender, but if you haven’t before now— no worries! If you have all your documentation and a good credit history, this is one of the easiest steps. The financial institution will review everything and then call you when you are approved.
It’s here! The last step is closing the deal. This is when you will sign the final documents and get the precious keys to your home. Partnering with a respected title services agency, the transfer of ownership will take place. If applicable, make sure to have:
- Contact information and marital status of all parties with street addresses
- Transaction fees/Commissions and the responsible paying parties (buyer/seller)
- Any addendums — provide copies of any revisions for the closing agent
- Any Power of Attorney (POA) or Trust documents
If the seller is not a U.S. citizen, the closing agent may need to deduct 15% in taxes (typically price paid) due to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Also, if there are any debts to be paid pertinent to the transaction, make sure to provide copies to the closing at least one week prior to closing day.
Contact a National Title Services Agency
These seven steps in closing a real estate deal the right way are key to a successful closing. Any questions? At Bay National Title Company we offer a number of services for buyers and sellers of all types across the country. Don’t think you own. Be sure. Contact us today.