What is the process when closing on a house?

Your Napa Valley real estate agent does much more than list and show properties. We’re also here to answer any questions you might have about the closing process. Though a real estate agent’s role at closing is minimal, we do know a thing or two about what happens on one of your life’s most exciting days.

Napa Valley Real Estate Closing Costs

Closing costs are the fees and expenses buyers and sellers pay on top of the property’s selling price. They usually range from 2% to 6% of the home’s purchase price and typically include:

  • Appraisal fee. Lenders require an appraisal to ensure a house merits the sale price and the loan amount is correct.
  • Origination fee. Usually 1% of the loan, this fee covers a lender’s administrative costs.
  • Credit report fee. The lender pulls a buyer’s credit report one last time before closing.
  • Recording fee. This fee can be paid by the seller or buyer and covers the cost of recording the transaction to make it official.
  • Title search fee. This payment covers the property’s title search and transfer.
  • Transfer taxes. Local or state taxes are charged as a percentage of the property’s value.
  • Underwriting fee. Covers the administrative costs associated with the underwriter who makes the final decision on mortgage approval.

The Closing Documents

Standard closings include closing documents that can contain a hundred pages or more. They include:

  1. A loan estimate and closing disclosure detailing a mortgage’s terms, interest rate, and closing costs. Buyers typically receive a copy of the closing disclosure about three days before closing.
  2. An initial escrow statement that shows payments, including taxes and insurance, that the lender will make from your escrow account during the mortgage’s first year.
  3. The mortgage note reflects the buyer’s pledge to repay the mortgage and details what options a lender has if payments aren’t made.
  4. The mortgage or deed of trust “secures” the mortgage note. It also allows the lender to file a claim against the property if the note terms are not met.
  5. A certificate of occupancy or CO is an “entry permit” when buying a newly constructed property.

Get Your Keys!

Receiving the keys to your new home is the final step of the closing process and one of the most rewarding. All you need to do now is make sure you’ve organized the closing documents and stored them in a safe place!

What Happens on the Day of Closing

The closing is usually attended by the buyer, seller, either or both party’s attorneys, a lender’s representative, the closing agent, and a notary public. The closing agent’s job is to ensure all documents are signed. They then transfer ownership of the property from the seller to you, escrow funds are transferred, and the title company representative registers the new deed in the buyer’s name.

Still have questions about what to expect at closing? Talk to one of the agents at St. Helena Real Estate today to learn more.

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