Many people in Tennessee dream of one day buying a home. However, before they become homeowners, they must go through the real estate closing process to complete the sale.
First, escrow will need to be opened. By having a neutral third party control the finances and documents involved in selling a home, it can ensure that no one takes advantage of either side. The party seeking to buy a home must also obtain a title search from a title officer, to ensure that no one else has a stake in the home. It may also be necessary to purchase title insurance. By doing so, if there is a cloud in the title it can be resolved before the sale is complete.
Also, each party may want to seek the advice of an attorney. Closing documents can be very complex, and sometimes it takes the help of a professional to fully understand what they mean. In addition, closing costs need to be negotiated. The parties should also look out for "junk fees," such as administrative fees and processing fees, among others.
The buyer will also want to have the home inspected for possible problems, including pest problems. If there are problems, they can request that the seller fix them. Also, in order to close, any contingencies in the purchase offer may need to be removed. Removal of contingencies often must be in writing and performed by a certain deadline. In addition, escrow will need to be funded. This includes the buyer's down payment, along with the funds deposited as earnest money.
Before closing, the buyer will also want to do a final walkthrough. By doing so, the buyer can ensure that the home hasn't been damaged and that anything else that was meant to be included in the purchase has not been taken away. Finally, the buyer and seller will sign the closing documents. It is important to take your time and review everything carefully. A house is often a person's biggest purchase, and it can affect a person's finances for a long time, so it is important that everything is correct and is agreed upon.
These are only some basic steps that buyers need to go through to become homeowners. Homeownership may be part of the "American dream," but it is important that it is not rushed into. An attorney can help both buyers and sellers understand their rights.
Source: Investopedia, "13 Steps to Closing a Real Estate Deal," Amy Fontinelle, Feb. 22, 2017