5 Things to Expect in the Process of Closing on a Property

When you’re ready to finalize the purchase of a property, closing is the final step before becoming its official owner. Closing on a property means no more pending tasks or obligations for you and the seller. You are finished with all your responsibilities as buyer and seller, and you own the property free and clear.

1. Your Final Walk-Through Before Closing

During a final walk-through, you’ll check the property after repairs have been done to ensure all issues have been resolved. If not, you can ask that the seller correct the issues before closing. You can also use the final walk-through to ensure everything is in order and document any issues that must be corrected. Be sure to use a checklist to document issues with the property, such as fixtures and appliances that need repair or replacements. If you don’t use the final walk-through to resolve issues with the property and make repairs, you could be liable for them after closing.

2. The Title Search and Identification of Property Issues

A title search is a thorough investigation of a property’s ownership and official documentation of any issues. It’s a critical part of any real estate transaction, and the seller’s title company should conduct it. During the title search, the title company will identify any ownership issues with the property, liens or legal issues that may affect its sale or transfer, encroachments on the land, and anything else that would prevent you from having clear ownership of the property. The title search also verifies that the property is free and clear of liens or other issues. If the owner still holds a mortgage or another lien on the property, you won’t be able to take full ownership of it until the lien is cleared. Your real estate agent will conduct the title search and identify any issues with the property. You’ll likely find out about them during your title search.

3. Review the Sales Agreement Again

The sales agreement is the contract between you and the seller that outlines the terms of the sale and each party’s obligations. Please carefully review the sales agreement one last time to ensure it accurately reflects any changes you made. If you don’t review the sales agreement before closing, you could inadvertently agree to terms that aren’t in your best interest. If anything in the sales agreement is unclear, ask your real estate agent or the seller’s agent for clarification before you sign.

4. Covenants, Conditions, and Restrictions (CC&Rs) Review

Covenants, conditions, and restrictions, or CC&Rs, govern the use of specific properties. They may regulate a wide range of things, such as the type and number of homes that may be built, landscaping requirements, pets that may be kept, and more. If the property you’re buying has CC&Rs, you’ll review them at closing. You’ll want to take the time to thoroughly understand what they mean and how they may affect you and your future use of the property. Find the CC&Rs are too restrictive. You may be able to negotiate with the seller to get rid of them, get a credit at closing for reducing their strictness, or obtain a variance from the appropriate governing body.

5. Finalization of The Sale

After you’ve gone through your final walk-through of the property and ensured that any deficiencies had been corrected, you can finalize the sale. This means that you and the seller have signed all the final documents and agreed to everything. The real estate agent will take care of the rest. The agent will bring you and the seller together to sign the final documents, closing the sale entirely. After signing the documents digitally, real estate closing software combines paper-based forms that are scanned and converted into digital documents. When you’re ready to finalize the sale, you’ll be asked to sign an affidavit of buyer’s or seller’s closing. This sworn document states that you, as the buyer, have received all of the property’s official documentation.

Conclusion

Your first order of business as an official homeowner is to make sure you close all of your pending tasks and finish any obligations you have with your real estate agent. Ensure that you’ve paid your real estate agent any fees they’re owed, finished any inspections or other tasks you need to finish, and returned any keys you’ve borrowed.