You have searched for homes for weeks, visited several open houses and now you have finally found the pefect home. The final part of the buying process is called closing. For firstime homebuyers, this final step can be confusing and may leave the buyer with many questions. Below are a few clarifications.
What exactly is closing?
Closing is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and selle. They then distribute them according to the buyer’s and seller’s instructions. The escrow becomes the depository for all monies, instructions and documents pertaining to the purchase of your home.
How does the closing process work?
When you close, all monies, instructions and documents necessary for the purchase of the home, including funds for the down payment, lender’s funds and documents for the new loan are held in escrow. The duties of an escrow holder include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with instructions; paying all bills as authorized; closing the escrow only when all terms and conditions have been met; and, distributing the funds in accordance with instructions.
What information will I have to provide?
Typically you will be asked to complete a statement of identity as part of the necessary paperwork. Because many people have the same name, the statement of identity is pucused to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is kept confidential.
How long is the closing process?
The length of closing is determined by the terms of the purchase agreement and can range from a few days to several months. Typically it can take an average time of 30 to 45 days.
Who is responsible for the closing costs?
How the charges for the services performed during closing can vary. The fees and service charges to be divided might include, the title insurance policy premium, escrow fee, and any transfer taxes. Unless there is some special agreement between the buyer and seller as to how these charges are to be paid, local custom will generally be followed in drafting the instructions to the escrow holder as to how they are to be divided.
When does the closing process end?
The closing process ends when all funds are transferred accordingly, when all documents are signed, and when you get the keys to your new home.