After a long and intense search for a property, negotiating pricing with the seller and finally reaching a deal, the settlement (or closing) process marks the end of a long journey. However, the settlement process should not be misconstrued as a simple and quick activity.
Settlement is often one of the most important steps in legally transferring the property ownership from the seller to the buyer. It's during this step that actual paperwork will be signed to cement the transaction and make it legally binding.
It's therefore important for you to prepare yourself for this important step. It's in your best interests to ensure that all the required processes are carried out correctly.
Step 1: Decide on the closing date
After negotiating and agreeing on a price with the seller, you will decide together on a date when the actual settlement will occur. You should propose a settlement date that is convenient for you and fits your financial timeline as well as your moving plans. When purchasing a home, the closing date that you select should take into consideration your mortgage processing time. You should ensure the mortgage clears by the time the transaction is being settled to avoid any delays and complications.
In addition, plan your settlement date to be around the time when you plan to move into your new home. This will enable you to minimise any additional costs that you would otherwise incur (such as extra rent or storage expenses).
Step 2: Prepare the necessary documents
Gathering the required paperwork is perhaps the most important part of settlement. There are many different documents you will need to have ready, such as the purchasing contract, mortgage documents, home appraisal reports and homeowners insurance documents.
Preparing all these documents can be quite time-consuming and stressful. It is often a good idea to work with a settlement agent to ensure that all the required paperwork is in place. Settlement agents will work on your behalf to gather and crosscheck the necessary legal documentation in preparation for closing.
Step 3: Prepare for closing costs
Unfortunately, the closing/settlement process is not free. There are several expenses that you will need to incur for property appraisal fees, paying your settlement agent, application expenses for various legal documents, and credit reports in connection with your mortgage. Preparing for these costs early will help you avoid any unpleasant surprises on the actual settlement day.
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5 March 2018
Buying real estate can be complicated, and that's especially true if you are preparing to buy your first property. Whether you are buying your first home or your first investment property, you probably have a lot of questions along the way, and this blog is designed to help. If you need tips about hiring the right agent, deciding which property is the best, applying for loans or anything else, you have come to the right place. I plan to include posts like that as well as many similar topics. I am glad you find this blog, and thank you for reading. Good luck on your real estate buying experience.