The Home Closing Process

1. Earnest Money — The first step for the buyer after acceptance is to write a check for the "earnest money deposit" (the deposit that secures the buyer's offer).
2. Title Check — Depending on the state you are from, a title company, closing attorney, or closing agent will be selected to handle the closing process. Their primary purpose is to get a preliminary title report, which is used to confirm that the seller is the legal owner of record of the property and that there are no unsettled liens or other claims against the property, including all real estate taxes and special assessments. If you haven't selected a title company, closing attorney, or closing agent yet, your Cygnus agent can assist you in finding a reputable firm.
3. Homeowner's Insurance — is the buyer's responsibility to obtain homeowner's insurance. Lenders always require the buyer to have proof of homeowner's insurance secured.
4. Disclosures, Inspections, and Contingencies — it is the obligation of the seller to disclose any material facts about the property. Disclosure of material facts can include any property defects or any lawsuits regarding claim to ownership on the property. It is generally the obligation of the buyer to arrange any inspections on the property, including general property and pest inspections. Your Cygnus agent will work with you to arrange all of the necessary steps as customary to your geographic area. Other contingencies to be aware of include financing, additional inspections, and sale of the buyer's current home. Once the disclosures and inspections are complete and satisfactory, your Cygnus agent will arrange to have any contingencies removed from the sales contract.
5. Appraisal of Property — the lender will arrange for the property to be appraised. The appraiser's report will describe the physical characteristics of the property and comparable property values will be used to determine the value of the property. There will be a thorough interior and exterior inspection. The inspections take about half an hour to one hour, depending on the size of the house.
6. Loan Approval — once all of the necessary steps are completed, the buyer's lender will notify the title company that the buyer's loan request has been approved. The lender will send the buyer's loan documents to the title company so that the documents can be signed at the closing appointment, which can also be called the "sign-off". At this time, the title company will schedule a closing appointment with the buyer and seller (separate appointments).
7. Request to Payoff Seller's Existing Mortgage — the title company, closing attorney, or closing agent will issue an order to the seller's existing lender requesting a demand for payment in full and all re-conveyance/release documents.
8. Cashier's Check — in preparation for the closing appointment, the buyer must obtain a cashier's check for the amount of money due upon closing. To find out the exact amount due, ask your Cygnus agent, who will work with the title company to ensure you have all of the appropriate information.
9. "Sign-off" and Closing Appointment — the closing appointment usually takes about 1-2 hours and is where all of the necessary title and loan papers will be signed by the buyer. Depending on your state, the seller will have already signed all the necessary paperwork or will sign them during this appointment.
10. Final Steps — once sign-off on all necessary documents is complete, the transaction needs to be recorded by the county and the formal change of possession must take place. Your Cygnus agent will arrange for the transfer of the property keys with the other co-agent. The "For Sale" sign and property lockbox will also be removed by the seller's listing agent so that your home will be ready to move in.

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