Closing on a house is the final step before the house legally becomes the buyer’s. The process involves the buyer signing off on the deal and transferring the last of the funds to the seller. At the end of closing, the deed records, and the buyer takes ownership of the home.
When Does Escrow Close?
In California, an escrow in California is officially closed the day the Grand Deed is recorded in the official records at the County Recorder’s office. The County Clerk date-stamps the deed, which transfers property ownership from the seller to the buyer.
Seller’s Responsibilities During Closing
Sellers have obligations to fulfill under the sales contract of selling their home. Some seller’s requirements include:
- Remove all possessions from the property such as furniture and appliances that are not specified to stay under the contract.
- Make any repairs agreed to make, such as fixing the roof, the windows, or floors.
- Clean the home right before the closing date.
When closing the deal when buying a home, it is important to consider other key points. That can affect the success of the closing.
Sellers Can Do but Not Obligated to Do
Sellers can also consider doing the following, though not obligated to do so:
- Notify subscription services, creditors, and acquaintances of seller’s new address and set up mail forwarding.
- Collect any manuals and warranties had for items in the home, such as the HVAC system and any appliances that will be left behind. Leave these on the kitchen counter for the buyer, along with any spare keys and garage door openers.
- Shut off water valves to prevent any leaks between the time the buyer takes possession and the time they actually move in.
Buyer’s Responsibilities During Closing
- Make an earnest money deposit into an escrow account, where a third party will hold the funds for closing costs until the closing date. An escrow account is the initial fund a buyer must deposit once the seller accepts the buyer’s offer. It shows not only that the buyer is serious about buying, but that they are also willing to put their money where their mouth is.
- Provide any documentation and information requested by the lender in the loan underwriting process.
- Obtain homeowners insurance. Many mortgage lenders require evidence of coverage to approve the loan.
- Search the title of the property to determine the seller is the owner and no liens or legal liability exist.
- Sign all closing documents, including the final mortgage documents.
- Pay remaining closing costs after the down payment’s credit to the escrow agent.
- Transfer the utilities into their name, effective on the closing date.
- Perform a final walk-through inspection to confirm the completion of required repairs and that the property is clean and free of damage.
KAASS LAW guides you through the home closing process, ensuring legal compliance and protecting your rights.
Removing Conditions and Reviewing the Contract
In many cases, certain conditions are included in the purchase contract. These conditions must be met prior to closing. For example, a buyer may insist on a condition that the transaction will not close until the mortgage loan is approved. Similarly, if there are defects discovered during the property inspection. The buyer can demand corrections or cancel the contract. It’s important that both parties carefully check that all conditions are met, otherwise the deal may be derailed.
Financing and funds transfer
In addition, the buyer must send the balance of the funds in advance of the transaction. This means processing a wire transfer in favor of an escrow agent. This agent is responsible for the safe distribution of the funds. It is also necessary to ensure that the amount of the wire transfer matches the amount specified in the settlement documents.
You should also verify the recipient’s information to prevent fraud. The Federal Trade Commission (FTC) warns about common scams. related to wire transfers in real estate purchases.
Final Due Diligence and Transfers
The buyer should conduct a final inspection of the home before finalizing the transaction. This ensures that the seller has fulfilled all agreements. This includes repairs and cleaning. Any discrepancies should be noted before the final documents are signed.
Remember, the transfer of title occurs when the county recorder’s office records the deed. That action marks the transaction as legally complete. For more information on the rights and obligations of the parties, you can read KAASS LAW article requirements for Los Angeles breach of contract lawsuit.