If you’re looking to buy a home, you’re in good company. About 63% of Americans believe that buying is better than renting, and owning your own home has long been part of the American Dream. With the market beginning to stabilize (meaning that listing prices and sale prices are closer together) as of 2013, many prospective homeowners are hoping to buy before prices go much higher. But far fewer people actually know how to wisely navigate the buying process.
Say you’ve done your research on buying in this housing market, identified real estate market trends and real estate values, and even vetted real estate companies for a real estate agent who knows your preferred location. These are all important steps. But in your focus on finding the perfect home, have you neglected to inform yourself on how to actually buy it? As Time Warner Cable News reported Oct. 26, closing is actually the most important — yet least discussed — part of buying a new home.
The Major Steps
There are many steps to closing, and they generally happen in this order:
- Opening an escrow account
- Waiting for a bank appraisal
- Agreeing on financing with a lender
- Approving seller disclosures of property concerns
- Obtaining various inspections
- Buying insurance
- Doing a final walk-through
- Reviewing the final statement
- Wiring a down payment, signing escrow paperwork and paying closing costs
These steps are regulated by various laws and are designed to ensure a fair and transparent transfer of property.
Choosing the Right Guide
If all of those steps look daunting to you, don’t worry. One of the major reasons people work with real estate companies, aside from getting help in finding properties, is that closing can be confusing. The key is informing yourself as best you can and then working with the right agents to guide you through the process. There are a few things to consider:
- How Communicative Your Agents Are
One of the best indicators of whether a real estate company is right for you is whether you feel you can ask questions and receive clear, helpful answers. The process of buying real estate is confusing, and your agent’s job should be to provide you with all the necessary information, educating you without expecting you to learn all the minutia.
- The Type of Sale
While there are fewer foreclosed properties on the market now than there were just a few years ago — the foreclosure inventory dropped by over 450,000 properties nationally in the year between August 2012 and August 2013 — there are still many foreclosed properties that offer great deals, especially to first-time homebuyers on a budget. But if you’re looking to buy a foreclosure, it’s wise to search out real estate companies experienced in dealing with them, since the closing process is often somewhat different from a traditional sale.
- Special Circumstances
If you have special concerns, such as finding a home and closing as quickly as possible (a frequent concern both for military personnel and civilians relocating for work), ask real estate companies if they have experience in expediting the home search and closing process. There are many factors your agents won’t be able to control, but certain agents may be more adept than others at pushing things through quickly.
Do you have any other advice to share on the closing process? Join the discussion in the comments.