When you are buying or selling a residential home in New York, closing is the final step in the process. This is when the property changes hands and the money is exchanged. However, prior to closing, several steps are completed, such as the following:
Deposit in escrow account
Prior to signing any documents transferring the property, a buyer often puts down what’s known as nonrefundable earnest money. This is done so that the seller knows that the buyer is serious about the purchase. The buyer can provide any amount and such amount will stay in escrow until closing, at which point it’s applied to the purchase price of the home.
A home inspection
A home inspection is also conducted prior to the exchange. This is done to ensure that the property is in good condition and no major red flags appear or major repairs are needed. The buyer typically pays for this inspection, and it is traditionally completed within a week or two of the accepted offer.
A title search
A title search of the property is also completed and one of the important aspects of purchasing a property. A title company is hired and they conduct a background check to ensure, in basic terms, that the seller is the rightful owner of the real estate property and that there are no outstanding liens or judgments against it. The results of the title search will be given to the buyer before closing.
A final walk-through
Prior to closing, the buyer also completes what’s known as the final walk-through of the property. This is not required but recommended. The buyer physically walks through and inspects the property one last time to make sure that it is in the same condition as when the offer was accepted.
Once the above prerequisites of a purchase are complete and there are no pending issues, the parties sit down to close out the transaction. At closing, both the buyer and seller will sign a number of documents transferring ownership. Such documents include but are not limited to the sales contract, loan documents and the deed. At closing, the buyer also typically provides documentation of procured homeowners insurance.
A residential closing can be a bit overwhelming for a buyer. However, getting the help of a real estate attorney who can remain by your side during the entire process is advised.