Texas real estate closings transfer property ownership from a seller to a buyer and usually proceed smoothly. Here’s an overview of what you can expect when you are buying or selling a home.
Preliminary preparations
Buyers deposit good-faith money, also called earnest money, into the escrow account of whatever company handles the closing. This entity is usually a title company or an attorney. The money’s sole purpose is to compensate the seller if the buyer cancels their offer before the closing. If no disputes occur, this money becomes a credit toward the buyer’s closing costs.
The buyer receives the final tally of the closing costs before closing. At that time, the buyer and their real estate agent should review the disclosure and correct any inaccuracies.
Closing companies usually require buyers to electronically transfer the amount of the closing costs to their bank account before the closing. Because of the prevalence of fraud, no one accepts personal checks, and many won’t take a cashier’s check either.
Both buyers and sellers must bring a government-issued photo ID to the closing. If that’s an issue, contact the closing company.
A buyer must also bring proof that their lender-required homeowner’s insurance policy takes effect on the closing day. Buyers typically pay the first year’s premium a few days before closing.
A buyer must also bring proof that their lender-required homeowner’s insurance policy takes effect on the closing day. Buyers typically pay the first year’s premium a few days before closing.
Buyer’s tasks
If a buyer is financing the purchase with a mortgage loan, the closing agent may request that the buyer arrives at the closing 45 minutes earlier than the seller. There’s a lot of mortgage paperwork that buyers need to sign. In addition, the closing agent explains every item in the closing disclosure to the buyer. All of this takes time.
Seller’s tasks
When the seller arrives, they sign the closing disclosure, and the closing agent may wire the sale proceeds directly to their bank, or the seller may request a check. The seller’s proceeds equal the purchase price minus their mortgage payoff amount (if any) minus the entire real estate commission and any credits they may owe the buyer. The closing company transmits the seller’s loan payoff to the lender. Once that’s confirmed, the buyer receives the key to the house, and the real estate agents receive their commission checks from the closing agent. Hopefully, everyone leaves happy.
You can help ensure that your closing goes through without any complications by understanding the process and what role you play. If you don’t wish to attend, ask the closing office to overnight the documents to you for signing.