SAVANNAH, GA, Jul 22, 2014—Purchasing a home is an exciting landmark, whether it’s your first or fifth property. However, the process is full of complications that many buyers and sellers do not understand. One of the most confusing elements is the closing, also known as the escrow process. This occurs between the time a seller accepts the purchase agreement and the buyer gets the keys to their new place.
A good agent will oversee this entire process, but as with any major transaction, it's a good idea to have a handle at what’s going on. To help, Connie Ray, President/Owner of Coldwell Banker Platinum Partners walks us through the complications of escrow.
“Many buyers don’t realize that one of the most expensive parts about buying a home is the closing cost,” explains Ray, who notes that the closing cost is usually between 2 and 4 percent of the purchase price.
There are two types of fees you will pay when closing on a house: non-recurring and recurring. Non-recurring are the actual closing costs that you are only expected to pay once. These include notary, wire, and attorney fees, home protection plans and a home inspection. Recurring costs include fire and flood insurance, property taxes, and mortgage insurance premiums.
“Once you and the seller have signed a purchase agreement, your agent will collect your earnest money and deposit it in an escrow account at the escrow company specified in the purchase agreement,” says Ray. What’s earnest money? Earnest money is a deposit that shows the seller that the buyer "earnestly" intends to purchase the property.
Next, according to Ray, the bank providing the mortgage will do its own appraisal of the property, and the buyer should secure their financing. Then the buyer will approve the seller’s disclosures, if there are any, and obtain the necessary inspections if they have not already done so.
Another thing that is extremely important for a buyer to remember when closing escrow is to buy insurance, including homeowner’s insurance and flood insurance,” says Ray.
When the closing date nears, the buyer will receive an HUD-1 form, or the final statement of loan terms and closing costs.
“While the closing process varies somewhat for every state, you can be certain both the buyer and the seller will need to sign a ton of paperwork the day of,” explains Ray. “After all the papers are signed, the escrow officer will prepare a new deed for the buyer, who will pay their down payment and closing costs.”
Coldwell Banker Platinum Partners, established in 1995, is a full-service real estate firm with more than 100 sales agents strategically dispersed among its office locations spanning from Beaufort, South Carolina, through the greater Savannah area to St. Simons Island, Georgia. The company was founded by Connie Farmer Ray, president and CEO of Coldwell Banker Platinum Partners. In addition to listing and selling residential real estate, Coldwell Banker Platinum Partners other divisions include commercial real estate, property management, relocation services, a real estate school, mortgage lending, and a publishing/media division. The companys corporate offices are located at 6349 Abercorn St., Savannah, Georgia. For more information visit their Web site at www.MyCbpp.com or call 800.505.8111.