In every real estate transaction or negotiation, you may always have heard the word “closing”. For every home sold, “closings” is the one of the most common term you may always encounter, especially when you are a home buyer.
But what exactly is a “Closing” in real estate?
Real Estate: Closing
Closings deals, also known as “settlement deals”, are the final steps involved in a real estate transaction. A closing deal is usually prompted to start during the negotiation period between the buyer and the seller, and is used when offers are accepted. Closing involves the final payment procedure by the buyer of the property, wherein ownership of the property is transferred to the buyer’s name, completing the contract between the two parties.
How does it affect a real estate transaction?
“Closings” are the very last part of a real estate transaction, wherein all the necessary expenses and adjustments to the property and its value are also documented and shall be incurred to complete the transaction. The buyer shall need to sign the “closing deal” to complete the real estate transaction. It is the moment where the new owner will be able to finally use its ownership over the property. It also records all the expenses that were done for the property and could be summed up with the total price value the property was sold or bought. If you are in New York, these are what they call “NY closing and settlement costs”.
What are the best steps into having a smooth closing deal in New York?
1. Open an escrow. Having an escrow is a good way to keep the contract in good faith for both parties. If the buyer did not continue with the deal, the escrow money will be given to the seller as a form to compensate him or her. But if the seller is the one who did not proceed and refused to continue on working as stated in the contract, the buyer can get back the escrow money.
2. Obtain Title insurance by doing a Title search in the property. The title search, which will help the buyer in proving that the property is safe from possible frauds and modus by which someone else claims the property as his or her own, which could also create conflicts in term of ownership in the future.
3. Decide whether to get professional real estate agents’ help or do it by yourself. In most cases, working with a professional one is better than doing it on your own. Real estate attorney’s, for example, are more knowledgeable in the processes involved in owning a property, processing and filing of legal documents to put the ownership of the property to your name, etc.
4. Try to avoid unnecessary fees. There are times that you have to deal with fees that seem to be irrelevant at all, only costing you money that shouldn’t be. As much as possible, review all the expenses that were reported and see to it that you are not spending money on things that are irrational and are just included to boost the expenses and take advantage of the buyer.
5. Ensure that a home inspection, as well as pest inspection is done on the home separately. Home inspection is one of the important projects that a buyer should initiate when buying a property. This is to know the current condition of the house and if it needs repairs that may add to your expenses. While pest inspection also serve the same purpose, allowing the buyer to know whether there are damaged areas of the house due to pest infestation, etc. Both inspections should be done separately.
6. Negotiate with sellers if there are possible repairs as a result of the home inspection. If repairs were found out during the home inspection, as well as pest infestation causing damage to parts of the property, it can be a good deal to talk to the owners or sellers and try to negotiate those expenses as their own.
7. Gauge your best interest rate when getting a mortgage and know what satisfies you. Think exactly what level of interest rate are you willing to lock on for when applying for a mortgage loan.
8. Make use of your earnest money. To show the seller that you are serious on buying the property. This could signal the seller to put off the property in the market, keeping it to both of you and making use of the earnest money to compensate the seller for doing so.
9. Take a final walkthrough in your prospect property. Walk around the property, have another look around and make sure that everything is in place as you wanted it.
10. Sign the papers and be sure to read and understand everything that is written before finally signing. Review everything that you have worked upon, read everything that is stated in the contract, understand and ask questions as much as possible to clarify things that may bother you. Then, be ready to sign the closing deal.
Home buying was always fun, though at times, it can be daunting. Great closing gifts maybe a way to improve transactions, but once you have taken a step forward into buying your prospective home, these steps may help you go further and definitely close a deal that will make you live happily ever after.