The Closing Process When Using an NJ Real Estate Agent

8 steps to complete a closing with an NJ real estate agent

 

When finally purchasing the home of your dreams with an NJ real estate agent, it is now time to complete the process with a closing. This process encompasses the final steps to owning your desired home. It is the most crucial part of home buying because it is a new beginning of your life in your own property.

Below are the steps to a typical closing process:

Offer to Purchase

NJ real estate agents know there is foolproof way to make an offer that is guaranteed to be accepted by the seller. Once you find your perfect house, it is wise to move fast. A good rule of thumb is to make an offer that is 8 to 10% below the asking price, though that might not work in some areas based on trends in the market. This gives you some room to negotiate, but be careful to not top what you have predetermined to be your top number.

Deposit

Also known as earnest money, this is a showing of good faith and commitment by the buyer to the seller. It is usually 1% of the home's purchase price and is included in an offer to purchase. Either the NJ real estate agent or the seller's lawyer holds the deposit in trust until the deal closes, and will inform you that if you decide not to close on a deal once your offer has been accepted, you may lose your deposit and be sued for damages. If the seller does not accept your offer, your deposit will be returned. If the sale proceeds, your deposit is usually applied to your down payment.

Contingencies

Contingencies are certain requirements specified in a contract that your NJ real estate agent will discuss with you that need to be met before the buyer is required to close. Some typical contingencies include; the buyer's securing of financing and an acceptable house inspection. In general, an inspection contingency covers a 10-to-14-day period from the acceptance of the contract, and financing contingencies run for 30 days. But in a seller's market, buyers may be asked to fulfill their contingency requirements in shorter amounts of time.

Contract

A contract follows the acceptance of an offer by the seller, and it is a legal and binding obligation, on the part of the buyer, to purchase the property if any contingencies are met. It outlines the details of the transaction, including: a description of the property, the selling price, the date of closing, the possession date, and any applicable contingencies.

HUD Statement

Also called a "closing statement", this is a document created by the Department of Housing and Urban Development requiring the accounting for all financial aspects surrounding the sale and purchase of a home. The Real Estate Settlement Procedures Act requires that a copy of the settlement sheet be distributed to both parties at least one day prior to the closing.

Closing Documentation

Before you can close on a house, some paperwork must be completed. This includes a title search to ensure clear title on the property, title insurance to protect the buyer and the lender, and a homeowner’s insurance application. Your NJ real estate agents will make sure this gets done properly to avoid any future mishaps.

Closing Costs

The total amount of closing costs can vary greatly, but may include: a loan origination fee, an appraisal fee, the cost of a credit report, a lender's inspection fee, the cost of title insurance, a mortgage broker fee, NJ real estate taxes and a fee for document preparation.

Final Arrangements and Settlement

Before the deal is closed and you take possession of your new home, you must make arrangements regarding utility service and first mortgage payment. Settlement describes the payment of the balance of the purchase price the buyer owes on the property, and the transfer of the title. It takes place on the possession date specified in the contract.

The NJ real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information about NJ real estate, call us today or click here to be connected with one of our top real estate specialists.