Real Estate FAQ
What is required to close as a purchaser?
Assuming you, as the purchaser, have agreed in writing to buy a piece of property from a seller, there are a few steps that need to happen before closing takes place. First, you will want to obtain a title search, to ensure that the seller is transferring the property to you free and clear of any defects or encumbrances. This involves reviewing prior deeds, surveys, easements and certifying that no mortgages, liens or judgments adversely affect the property. If your purchase is being financed by a lender (the bank), that lender will likely require any title defects to be cleared before closing. The lender will also likely require you to pay for a title insurance policy (see below for more details). The closing disclosure, signed at closing, will spell out all the financial aspects of the transaction — specifically, which side is responsible for certain closing costs. Appraisals, home inspections and surveys are other common purchaser costs.
What is required to close as a seller?
Assuming you, as the seller, have agreed in writing to sell a piece of property to a buyer, there are a few steps that need to happen before closing takes place. A title search will determine whether there are any defects or encumbrances tied to the property title. If there are mortgages, liens or judgments adversely affecting the property, they will need to be satisfied or paid off before closing. The deed, signed at closing and recorded in the clerk of court’s office following closing, officially transfers title of the property from you to the purchaser. The closing disclosure, signed at closing, will spell out all the financial aspects of the transaction — specifically, which side is responsible for which closing costs.
What is title insurance, and do I need it?
Title insurance protects the insured from any financial loss related to issues or defects in title. Essentially, title insurance perfects one’s title rights, or provides compensation should one lose property due to an undiscovered defect. If a lender is involved, the lender will require lender’s title insurance as a condition of the loan. Homeowner’s title insurance is an optional, but recommended, policy which protects the purchaser from any fallout related to undiscovered title defects. The cost of a title insurance policy is based on the purchase price of the property and can range anywhere from $100 to $2,000.