Closing process

Buying & Selling Real Estate
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Closing process

Scott Campbell
Boston, MA · Member since 2014 · 21 posts · 1 vote

I was wondering if someone could go through and explain the entire closing process when buying a house. For instance, who is involved? What role does a title company play? What exactly is escrow, and earnest money? From what I understand, there is a point where the earnest money is non refundable if the buyer backs out of a purchase (not sure though). At what point does the home inspection take place? Sorry for the beginner question if this has been covered before... Thanks!

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    12y

    @Scott Campbell

    Remember at some point everyone on this site didnt know what earnest money was. I still remember asking my mentor what earnest money was. I suggest you get the 6th edition dictionary of real estate terms, its will be useful to you. The only bad questions are the ones not asked.  With that being said I will try to answer a few for you; here goes:

    Earnest money is usually money required as an initial down payment that goes along with the purchase contract.  In your purchase contract it should state a time frame or conditions that need to be met in order for  you to either cancel the contract and receive 100% earnest money refund or it becomes the sellers should you not close on the purchase.  

    Anyone who is getting a home inspection needs to have it completed within the due diligence period that is agreed on in the contract.  Usually its one of the first things done once a contract is accepted. 

    For a typical closing, the people involved are the buyers closing attorney, the sellers closing attorney, the lender if financing is involved, and a Realtor if either buyer or seller has one for the transaction.  Title insurance is usually handled by the closing attorneys. 

    Hope this helps you a little.

    Curt Davis - KAIZEN Realty538 Reviews
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  • Scott Campbell
    OP
    Boston, MA · Member since 2014 · 21 posts · 1 vote
    12y
    Originally posted by @Curt Davis:

    @Scott Campbell

    Remember at some point everyone on this site didnt know what earnest money was. I still remember asking my mentor what earnest money was. I suggest you get the 6th edition dictionary of real estate terms, its will be useful to you. The only bad questions are the ones not asked.  With that being said I will try to answer a few for you; here goes:

    Earnest money is usually money required as an initial down payment that goes along with the purchase contract.  In your purchase contract it should state a time frame or conditions that need to be met in order for  you to either cancel the contract and receive 100% earnest money refund or it becomes the sellers should you not close on the purchase.  

    Anyone who is getting a home inspection needs to have it completed within the due diligence period that is agreed on in the contract.  Usually its one of the first things done once a contract is accepted. 

    For a typical closing, the people involved are the buyers closing attorney, the sellers closing attorney, the lender if financing is involved, and a Realtor if either buyer or seller has one for the transaction.  Title insurance is usually handled by the closing attorneys. 

    Hope this helps you a little.

     Oh ok, thanks Curt... So earnest money is like a deposit for buying the property. After I get the home inspected, if there turns out to be a major repair needed, and the seller refuses to fix it, would i still lose the earnest money if i decide not to buy it? Also, what is title insurance? Ive heard of it before, but not sure what it covers. Thanks for the info, learning one step at a time ha ha

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