A real estate closing is the last stage of the home buying and selling process. After an offer has been accepted, several steps must still be completed before a property can officially transfer ownership. Knowing what these are will help you be better prepared to make wise decisions and finalize a successful transaction. Here’s an overview of the basic steps involved in closing a deal.

A Guide to the Real Estate Closing Process

1. Open Escrow

The closing process is initiated by opening an escrow account. This is managed by an unbiased third party who will hold onto all the important documents and funds related to the transaction until all the conditions in the purchase and sale agreement have been met. Doing this ensures both parties are protected.  

2. Clear Title

Next, a title search will be ordered to see if there are any existing liens, loans, or judgments attached to the property’s title. Extensive research will be performed to verify the legal owner and identify defects that could prevent the home from being sold or cause legal issues for the new owner. A report will be prepared and the buyer will be advised to secure title insurance for any future claims made against the title.

3. Hire an Attorney

Under Massachusetts law, real estate closings must be conducted by an attorney. As such, you’ll need to seek legal representation to complete a valid transfer of property. They may handle a variety of responsibilities, such as writing the purchase and sale agreement, examining the title, coordinating the delivery of documents to be signed at closing, explaining all documents, and distributing the funds appropriately.

4. Schedule Inspections & Property Appraisal

Mortgage lenders typically require a professional home inspection and appraisal to be conducted before a loan can be approved. The inspection will reveal any major flaws with the property, allowing buyers to back out of the deal or renegotiate their offer. The appraisal will provide a report that helps determine the property’s value.

5. Loan Approval

Once the lender is satisfied that the property meets all guidelines, the mortgage loan will be approved and a Closing Disclosure will be provided to the buyer. This details the terms of the loan, monthly payments, and closing costs. Borrowers must review and sign all supporting documentation.

6. Sign the Papers

On closing day, the buyer and seller will finish signing all pertinent paperwork, and the transaction will be recorded with the county. Funds will be dispersed, and the buyer will receive the keys.

If you’re buying or selling a home, Bernardini Law, P.C., in North Andover, MA, can guide you through a smooth and seamless transaction. Attorney Christine Bernardini offers more than a decade of experience in real estate law and is committed to providing legal advice and representation that protects your best interests. Call (978) 794-5525 to schedule a consultation, or visit the firm online to learn more about their services.