A Complete Walkthrough Guide of The Closing Process in the State of Texas

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The Closing Process in Texas

Even though some home buyers think once they find a home with everything on their check list is hard, there is more to do once you put an offer on a property.

The closing process will begin when the sales contract is signed by both the buyer and seller. Once signed it is delivered to the Title company, typically along with Earnest Money Check.

Escrow and Title Order Begins

When delivered, Earnest money is accepted by the escrow agent, which is usually done by written notation on the contract, following a title order. 

There are many steps involved in closing a property. The following is important to understand along with terminology and what action you are expected to take to make sure everything runs properly. 

Common Terms Having to do with Closing

Appraisal

An appraisal determines the value of the home to ensure that the price reflects the home's condition, age, location, and features such as the number of bathrooms. Also, appraisals help banks and lenders avoid loaning more money to the borrower than what the house is worth.

Contract

It is a written agreement between buyer and seller to transact real estate. The buyer agrees to pay an agreed-upon amount for the property. Carefully review the terms of your contract before signing it. Once signed, completed, and executed, it will be delivered to the title company by the real estate agents. 

Earnest Money

What is Earnest money? Earnest money is a deposit made to a seller that represents a buyer's good faith to buy a home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing and the amount is specified in the contract and deposited with the title company. 

In most cases, the earnest money becomes part of the purchase price. If the deal falls apart, typically the buyer gets the earnest money back in full. 

HOA Resale Certificate

If the property has a homeowner’s association (HOA), the resale certificate, as well as the rules and regulations documents, must be ordered and delivered to all parties. 

Exchange of Information

All applicable parties, title company, buyer, seller, and mortgage company exchange necessary information.

Inspections

The buyer seeks and hires a professional home inspector to ensure the property is in good condition and must be done before the option period ends. 

Mortgage Company

If the buyer does not have the cash to buy a home, must secure a lender to obtain a mortgage. The sale can ONLY go through, once their loan is approved. 

Survey

The seller must supply a survey of the property. It must be approved by the title company. If no such survey exists, a new one must be done. 

Title Documents

The buyer and their lender will receive copies of the title commitment, tax certificate, property restrictions, and other pertinent documents to review. 

Title Search

A title search is an examination of public records to determine and confirm a property's legal ownership and find out what claims or liens are on the property. A clean title is required for any real estate transaction to go through properly. A title company must be hired to do a search on property records. It also looks for liens or unexpected issues that can mess up the transfer of the property to the buyer.

The Next Steps

As soon as all issues/contingencies are addressed and approved by both parties, they are removed. The go-ahead to close the sale is then given by both the lender and the title company.

Time to set up a time to sign all closing documents for both the buyer and the seller. Before the signing, the buyer may and should schedule a final walk-through of the property to confirm they accept the property as-is.

New Deed Issued and Title Transferred

After all money and property is transferred to the appropriate parties, the deed is recorded, and the records are filed in court records. The title insurance policy with the new buyer is issued.

Items to Bring to a Closing

There are certain items to bring with you when your closing date arrives: if you are the buyer, bring money in the form of a certified or cashier’s check. Or if possible you can also look into having your funds wired to the appropriate party.

If you are the seller, you will need to bring along the following items:

  • Valid photo IDs (both spouses)
  • Keys to property
  • Garage door opener(s)
  • All receipts of repairs to the property

If the buyer is wiring their payment, you will need to provide them bank information.

What to Expect at the Closing?

The following usually attend a closing:

  • Seller
  • Seller’s real estate agent
  • Buyer
  • Buyer’s real estate agent
  • Title company representative
  • Mortgage representative (if applicable)

In Texas, however, the buyer and seller close at different times and therefore will not run into one another. 

Time To Sign

Since there are a lot of legal documents to sign, you may require a hand massage later, just kidding, so be prepared.

If there are any glitches, they typically take care of them three days prior to closing. So, do yourself a favor and allow a little extra time for the signing process to happen. 

Considering Selling Your House?

The closing process in Texas takes a little time. And if you need/want to sell, I may be able to help you. Click here to Sell your home!