If you are a first-time homebuyer, then you are likely finding yourself in uncharted territory. The entire experience itself can be very confusing and, in turn, overwhelming - but it doesn’t have to be. Simply take some time to familiarize yourself with the process and you will know what to expect along the way.
Below you will find a step-by-step overview of the home-buying process.
Step One: The Sales Contract and Escrow
Whether it is the first or fiftieth home you looked at, when you find the home of your dreams, you will know. Generally working with your real estate agent, you will put down an offer on the home. If the buyer accepts it, you will sign a sales contract. This pulls the house off the active market.
The sales contract will then be turned over to a closing agent. Any earnest money will be held in escrow by an escrow agent until the closing. The title order is then ordered and everything begins to move forward, including the gathering of tax information, loan payoffs, inspection, surveys, etc.
Step Two: Title Search
A title search is a diligent search through public records regarding the property. This includes things like deeds, mortgages, liens, judgments, taxes, bankruptcies, divorce settlements, trusts, and so on. The title examiner is looking for anything that can affect the title of the property.
During the title search process, it will be confirmed that the seller has the right to sell the property, as well.
Anything that is discovered is put together into what is known as a title commitment (though sometimes referred to as a preliminary report). This is then given to another title team to review. If there are issues concerning the title, these will need to be addressed before the closing can take place. If no issues were found, it is often said to be clear to close and it moves on to the next step.
Step Three: Closing Documents Are Prepared
Many documents need to be prepped for the closing. There are legal documents, loan documents, a new deed, any riders specific to your transaction, and so forth that need to be drawn up, reviewed, and organized. This is often done by your title company. During this time, all charges that will be due at closing will be assembled, too.
When all of this is done and ready to go, closing statements will be prepared and the closing can be scheduled.
Step Four: Settlement/Closing
In the home buying process, the terms settlement and closing are used interchangeably. This is the stage in the process when the seller and the buyer sign off on all the necessary docs and money changes hands. Often facilitated by the title company’s escrow agent, there are usually a few people that come together for this meeting, including the title company, real estate agent, buyer, seller, and any attorney or other party with an interest in the transaction.
Depending on your title company and your situation, your closing may take place in an office or it may be done remotely or in the comfort of your own home.
Step Five: After the Closing
Once the closing is complete and all the documents are signed, there are no further actions required by the buyer or seller. The escrow agent will move forward with sending payments where they need to go - including paying off old mortgages, commission fees for real estate agents, and the like. If purchased, title insurance policies will be prepared and sent out to the buyer and lender.
And, finally, all documents concerning the transaction, such as the mortgage documents and the new deed, will be sent to the local county recorder’s office for recording.
The real estate transaction has been finalized.
Are You a First-Time Home Buyer?
Liberty Land Transfer is a Pennsylvania-based title company dedicated to fostering long term relationships. If you are a first-time home buyer, the team at Liberty Land Transfer, Inc. is ready to walk you through the process.
To learn more or to order title, contact us today at 866-216-9999.