The closing process involves many steps, but it is your real estate agent’s job to make the process as frictionless as possible. When you buy or sell with a Mission Team Agent, she or he will guide you through the entire closing process.
The following is a checklist of critical steps and info to help walk you through the process:
organization is key.
It is important to understand the process before it begins. The system is in place to ensure that all parties are protected and nothing slips through the cracks. Make sure to lean on your Mission Team Agent to explain all steps and what is expected from you.
Understanding contingencies
Contingencies are conditions that are included with an offer that must be fulfilled before the deal is closed. For example, a buyer can submit an offer with a home inspection contingency—this allows the buyer to back out of the deal if anything is found during the inspection that will require repair. Common contingencies that come up during the closing process are appraisal, inspection, title, and financing contingencies.
attorney review period.
Once a sales contract has been signed by buyers and sellers and delivered to each it becomes enforceable. The attorney review clause allows for review by buyers' and sellers' attorneys, where any requested changes must be served by each to the other side in writing within 5 days; Monday through Friday. A further 5 days is allowed for resolution, or extension of this time-frame as needed.
Earnest money
One to three days after the seller accepts an offer on a home, the buyer will deliver their to a title or escrow company, which will hold t during the transaction. Earnest money, also referred to as the Good Faith Deposit, is typically 1%–3% of the sale price of the home and is applied toward the buyer’s closing costs. If the buyer backs out of the deal for anything not covered by a contingency, they will likely forfeit their earnest money.
Home inspection
During the attorney review period the buyer, unless they waived the contingency, will schedule a home inspection. A licensed home inspector of the buyer's choosing will give them an accurate picture of the home's condition and identify any major issues with the home, so they can confidently negotiate and close the deal.
An inspection generally takes a few hours, and at the end the buyer will receive a report outlining any issues discovered during the inspection (there will be issues). At this point the parties can agree to move forward as is, renegotiate to solve the repairs or the buyer can back out of the deal at this point.
*Your Mission Team Agent can set you up with one of their preferred Gold Standard partners.*
If you are aware of certain defects with your home it is advisable to have those problems addressed before the sale, if possible. We know they will come up during the home inspection and potentially put the deal in jeopardy.
home appraisal.
Unless a homebuyer is paying all cash, they will get a mortgage. Then, their mortgage lender will order a home appraisal. If the home does not appraise, meaning the bank doesn’t think it’s worth what the buyer is offering, the buyer will have to decide what to do. A home appraisal contingency allows the buyer to back out of the deal at this point or renegotiate a new price that the lender and seller are happy with.
Before the appraiser arrives, make sure to have all paperwork available, including major improvements with original permits, as well as, any comparable properties you can use to justify the price. The more information the appraiser has the better.
title and financing.
Once the deal has been renegotiated (if necessary) and the home has appraised out, now a marketable title must be produced. Meaning verification that the home's title is clear of any liens or other issues before completing the purchase of the home. Then the buyer will secure financing. If the buyer has a financing contingency and is not able to secure a loan to buy the home, they can back out of the purchase and reclaim their earnest money.
What is title insurance?
Title insurance protects against losses in the event that a problem arises with the title after the home is purchased. For most home purchases, there are two parties who require title insurance—the lender and the homebuyer.
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final walk-through.
One of the very last steps is the final walk-through, which should confirm these things:
- That the house is in the same condition as when the offer was accepted.
- That all necessary repairs have been completed.
- That everything that was included as part of the sale is still in the home.
- The home was left in "broom clean" condition.
Try not to do your final walk-through too late. Sometimes buyers will wait until the morning of the closing to do their walk-through. This is not ideal in the event that something needs to be addressed. This is certain to cause delays or rescheduling of the closing. Shoot for 1-2 days before just to be safe.
it's closing time.
The final step in the process is to pay all closing costs, sign documents and exchange keys. Both sides pay their share of closing costs and will be well prepared with what they need to bring on the day.
The real estate sales process can be quite complicated, but rest assured that these measures are in place for both the buyer's and seller's protection. With that said, your Mission Homes Agent can explain all parts of the closing process to you and avoid any surprises.
