The closing process is made up of four steps - 1. Escrow, 2. Inspection, 3. Final Walk-through, 4. Closing.
1. Escrow - After you have found the home of your dreams, you will enter into a purchase and sales agreement to make an offer to a Seller. A deposit of earnest money will be given to the Broker with the purchase and sales agreement. When you have negotiated an acceptable offer with the Seller the earnest money will be deposited into an Escrow account by the listing Broker's office. The escrow account in most cases is a non-bearing interest account until the day of closing.
2. The Buyer's Inspection - Buyers should always have a Professional Home Inspection regardless of whether or not the seller has already conducted an inspection. The purpose of the buyer's home inspection is to discover if there might be a cause for the Buyer to back out or ask for a pricing concession if repairs are needed. Make sure that your agreement is contingent on the Buyer's inspection.
3. The Final Walk Though Before Closing - The Buyers will visit the home one final time before the closing to inspect the property and make sure that the condition of the home has not changed.
4. The Closing - The closing is when the buyer, the seller and their real estate agents and closing attorneys come together to finalize the real estate transaction. The settlement agent conducts the closing which takes place at the Lawyers office, the Title Company office or the Real Estate office. They will present the HUD Settlement Statement detailing the buyers and sellers itemized costs for the transaction. The Buyer will have an insurance binder for homeowners insurance and will bring a check for the balance of funds needed for closing. The Seller will provide the Warranty Deed to the property conveying title to the new Buyers. The Mortgage Company provides the papers that need to be signed by the Buyer's. The Promissory Note and Mortgage are a promise to repay the loan to the Lender, unless of course it's a cash transaction. Be prepared to sign you name as many as 25 times or more. The deed and mortgage will be recorded in the Registry of Deeds putting the world on notice of who the new owner of the property is.
After the Closing - The new Buyer's will be given the keys to their new home. Most Sellers agree to vacate the property prior to the day of the closing. If you are the Seller you should plan to contact your insurance agent to cancel your homeowner's policy for the date of transfer. Also call your electric company, gas company, cable provider and any other utilities to cancel. The new owners should contact the utility companies to have the services put into their names for the day of the closing.