Steps Between Contract Sale and Closing
If you've ever found yourself pondering the intricate journey between the sale and closing of a home, you're not alone. The path from signing the sales contract to officially owning a property is filled with crucial steps and important milestones that can seem both complex and daunting. Understanding this process can demystify what happens behind the scenes and help set clear expectations for what's to come. From home inspections and appraisals to finalizing financial details and navigating legal paperwork, each stage plays a critical role in ensuring a smooth transition from buyer to homeowner. Whether you're a first-time buyer or a seasoned investor, knowing what to anticipate can make the entire experience more manageable and less stressful. We’ve provided a 14-step overview of what your closing process may look like with LGI Homes.
1. Sign the purchase agreement
The purchase agreement describes the sale transaction in general. This is signed by both parties involved in the sale (buyer and seller) and outlines the price of the home, closing date, inspections, and other conditions of the sale.
2. Lender (Mortgage Company) Requests Title by Email
The lender, as part of their due diligence, requests a copy of the title report to ensure that the property is free of liens or legal issues that could affect the sale. This request is often sent to the title company or escrow agent handling the transaction.
3. The title company reviews the purchase agreement and verifies property information
This includes reviewing the address, legal description and seller name with property tax assessor collector.
4. Order title research, HOA documents and Builder Warranty
These are a few of the documents to confirm legality of the sale, signing off on the HOA’s bylaws and conditions, and understanding the builder’s warranty policies and coverage duration.
5. Prospect Registration Agreement Received
This step is only applicable when working with a realtor. See the broker section of our website for more information.
6. Title commitment prepared, reviewed and sent to relevant parties
A title commitment, also known as a title insurance commitment, is a document issued by a title insurance company that outlines the terms and conditions under which the company is willing to issue a title insurance policy. It is a crucial part of the real estate transaction process, providing detailed information about the property's title and any potential issues that might affect ownership. The title commitment is emailed to LGI, the buyer and their real estate agent, if applicable.
7. Communicate with real estate agent (if applicable)
This conversation includes how and where to pay their earned commission.
8. Survey received and reviewed
A professional land surveyor conducts a detailed examination of the property and creates a report that confirms the location and description of the property.
9. Updated title commitment with survey sent to the lender for final preparation
10. Clear to Close notice received from Sales Manager
A "Clear to Close" notice is a formal notification from a lender or mortgage processor that indicates a borrower’s loan application has passed all the necessary approvals and conditions, and the loan is now ready to move forward to the final stage of closing.
11. Schedule Notary for buyer
The notary ensures that all documents are signed so the buyer can continue through the process with as little delay as possible.
12. Lender and buyer funds should be sent and received by title
Funds from the buyer could include the funds for their down payment, closing costs, and any other required fees such as title insurance, appraisal fees, etc.
The lender provides the funds for the mortgage loan, which typically includes the amount being borrowed, which is used to cover the remaining purchase price and possibly some closing costs.
13. Title company and lender documents merge to create the document package
The document package includes all the documents that have been gathered throughout the closing process to bring to the signing of the closing documents.
14. Forward the closing documents to the LGI information center or remote notary for printing and signing.
In summary, we've walked through the essential steps that bridge the gap between the sale and closing of a home, from title research and document reviews to finalizing the funds and recording the transaction. Understanding each stage of this process can help make your home buying or selling experience more seamless and informed. As you navigate these important decisions, we hope you'll consider partnering with LGI Homes. Our expertise and dedication are designed to guide you every step of the way, ensuring a smooth and successful closing. We look forward to the opportunity to assist you in achieving your real estate goals!
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