Closing or settlement, in some areas, is the final step when completing a real estate transaction. In more literal terms, closing is when the seller and the buyer fulfill all of the agreements stated in the sales contract.
Generally, several things happen during closing such as:
- All required documents are signed, recorded, and/or delivered (e.g. deeds, leases, mortgages)
- An accounting is made between the parties involved
- Transfer the last of funds
- Transfer of ownership and possession of the property
Closing is the day when all parties involved meet to make the real estate transaction official. After all the time spent, the last chapter is almost here and your dream home is close to being yours.
At closing significant events transpire…
- The property title is being transferred from seller to buyer.
- The proceeds of the sale are distributed to the seller.
- The buyers signs the mortgage note if the home is financed.
At this time, the buyer and the seller pay other fees like title insurance, pro-rated property taxes, and real estate commissions.
Who is present at the home closing process
In almost all cases, the buyer and the seller are present at closing. In other areas, the seller has a separate appointment and won’t be in the room for this process. From there, you have your closing agent, a neutral third-party who is usually an attorney, a title officer, or an escrow company officer. Of course, you will have a representative on hand from your lender, your real estate agent or an attorney present, especially if it’s your first home. In summary, here’s a list of people who could potentially be part of a home sale’s grand finale:
- The buyer of your house (yes, that’s you)
- The seller of the house (sometimes, depending on state and circumstance)
- Buyer’s agent
- Seller’s agent
- Buyer’s real estate attorney
- Seller’s real estate attorney
- Title Company
- Title insurance agent
- Mortgage professional
What to bring to closing
- All your paperwork – up-to-date, signed and organized
- Your valid identification
- Check for your down payment and closing costs
- Your checkbook (for items that aren’t included in the settlement)
Texas Closing Costs in 2021
Houston homebuyers might not be aware of the common closing fees associated with buying a home. Aside from the actual price of your home and down payment, the average closing cost in Texas is $3,744 after taxes, or approximately 1.25% to 1.87% of the final home sale price. You might either be surprised with the closing fees or a few extra thousand might not seem a lot. Still, we recommend that homebuyers work with an experienced local real estate agent or realtor so you are prepared on this side of the closing.
If you are curious as to how much the average closing costs by state is, with or without taxes, you can check the list here.
Closing Costs for Buyers
Closing costs vary widely based on the property you buy, where you live, and the type of loan you choose. Here’s a glimpse of what is included in closing, but it’s not likely that your loan will include all of the fees listed here.
- Application fee
- Appraisal fee
- Closing Fee or Escrow Fee
- Credit report/check fee
- Home Inspection
- Home Owners Association Transfer Fees
- Homeowners’ Insurance
- Owner’s Policy Title Insurance
- Origination and/or underwriting fees
- Recording Fees
- Title insurance
- Title search fee
- Transfer tax (if applicable)
- VA Funding Fee (if applicable)
Closing Costs for sellers
Here’s a quick breakdown of potential costs and fees for Seller closing costs:
- Agent commission
- Transfer tax
- Title insurance
- Escrow and closing fees
- Prorated property taxes
- HOA fees
- Credits toward closing costs
- Attorney’s fees
Another important reminder for buyers is to review the HUD-1 document before closing as this documents lists each expense as well as who is to pay what amount.
Though it may seem that the closing process is a lot of work, knowledge and preparation are essential in order to get things right. As a buyer, take your time instead of hurrying things up. Don’t sign anything that you haven’t read or understand. If you’re hesitant to hire an agent, we recommend that you talk to a local Huston realtor first and discuss about your plans of buying your dream.
About ApexPro Real Estate
ApexPro Real Estate Group is a full-service real estate brokerage specializing in single family and attached residential properties throughout Houston and the surrounding areas. We are a privately-held small business that brings together top agents, cutting-edge technology, and unparalleled service to help clients throughout Houston to buy and sell real estate — and enjoy themselves every step along the way. Our client reviews exhibit our dedication to help our clients extends beyond the closing table and we would love to earn your business.