Technically, a real estate deal is “closed” when all the paperwork is signed and the new owner gets the keys. Before that happens, there are a few things that you have to know about. Having some insider knowledge about how a real estate proposition works, and not just having faith in the word of your realtor, is always a good idea. This is why Al Hartman has developed a list of 10 steps that happen before a deal truly is closed, something that every individual should be aware of.
Al Hartman’s 10 Steps of Closing a Real Estate Deal
- You should walk through the property. Don’t rely on a photo that you have seen and accept that the property is in the condition showed.
- Have the right insurance policies in place, which you probably have to do before you can close on your mortgage. This is certainly the case in Houston. This insurance protects both you and the lender, should something happen to the property.
- Open your escrow account, which is needed to make the financial elements more comfortable and easy to manage. Escrow accounts also stop both seller and buyer from engaging in fraud, because a neutral third party holds all the documents and money.
- Lock the interest rates down if you haven’t yet. Make sure, however, that the interest rate is as low as you believe it will get.
- Ask for a pest inspection to be completed. Look for carpenter ants and termites in particular, as those could destroy your property.
- Get a title insurance policy in place, which will protect both you and your lander in the event of problems with the land after closure. Make sure you shop around to get the best policy.
- Speak to a lawyer so that all your legal documents are in order and conform to the real estate laws in your particular area.
- Consider renegotiating the offer, particularly if you have found any problems, for instance at steps 1 or 5. If you do have to make repairs or call in professionals, the price should reflect this.
- Get your final finances in order. Make sure you have the money for your down payment and closing costs ready.
- Make an appointment for the closing, attend it, and take ownership of your new property. Make sure your attorney is there with you as well, as they will once again make sure that everything is legally in order and you aren’t hit with any financial penalties.
Yes, it can seem very tedious to complete a real estate deal. You have found a property that you want and all you now want to do is get on with it. However, a property is probably the most expensive thing you will ever buy, and it is very important that you properly manage each and every step. This will also make sure that you get the most out of your property once it is yours.