When buying or selling a home, closing is the final but crucial step that turns it into a done deal. Whether purchasing a home in Spokane, WA or selling one, being well-prepared for the closing process can make the difference between a smooth and stressful transaction.
The real estate market in Spokane has seen steady growth in recent years, with a mix of charming historic properties, modern developments, and scenic luxury homes. The demand has led to increased competition among buyers, making it even more essential for them to understand the closing steps. Each phase is vital in ensuring a successful outcome, from managing paperwork to coordinating with lenders, title companies, and real estate agents.
Know what you're signing
Before closing, buyers and sellers must carefully review the purchase agreement — arguably one of the most critical documents in a real estate transaction. The agreement is a binding contract between both parties, detailing the terms and conditions of the sale. It outlines everything from the agreed-upon purchase price to contingencies such as financing, inspection, and the closing date. For buyers, a thorough review ensures that they understand their obligations and rights. For sellers, it clarifies the terms of their commitments, ensuring that all negotiated aspects are reflected.
The purchase agreement also includes important deadlines, such as when the buyer must secure financing or when the home inspection should be completed. Missing these deadlines could result in delays or even jeopardize the sale. That's why buyers and sellers need to work closely with their Spokane, WA, real estate agents to go over the agreement line by line to ensure a clear understanding of what is expected, minimizing the potential for misunderstandings or conflicts during closing.
The purchase agreement also includes important deadlines, such as when the buyer must secure financing or when the home inspection should be completed. Missing these deadlines could result in delays or even jeopardize the sale. That's why buyers and sellers need to work closely with their Spokane, WA, real estate agents to go over the agreement line by line to ensure a clear understanding of what is expected, minimizing the potential for misunderstandings or conflicts during closing.
Home inspection and appraisal
A home inspection and appraisal are vital steps in the Spokane closing process, each protecting the buyer's investment. A home inspection involves a qualified inspector thoroughly evaluating the property for structural or mechanical issues. The process ensures the buyer knows of any potential problems, from plumbing leaks to roof damage, which could affect the home's value or require costly repairs. Buyers can negotiate repairs or a price adjustment if significant issues are discovered.
An appraisal is an objective assessment of the property's market value conducted by a licensed appraiser. It ensures that the home's value aligns with the price agreed upon in the purchase agreement, which is crucial for securing financing. Lenders use the appraisal to determine how much they are willing to lend, ensuring they only finance a property for what it's worth. If the appraisal is lower than the purchase price, buyers may need to renegotiate or make up the difference.
An appraisal is an objective assessment of the property's market value conducted by a licensed appraiser. It ensures that the home's value aligns with the price agreed upon in the purchase agreement, which is crucial for securing financing. Lenders use the appraisal to determine how much they are willing to lend, ensuring they only finance a property for what it's worth. If the appraisal is lower than the purchase price, buyers may need to renegotiate or make up the difference.
Getting the green light
Securing financing starts with pre-approval, where lenders assess a buyer's financial situation — such as their credit score, income, and debt — to determine how much they can borrow. Pre-approval gives buyers a clear understanding of their budget.
Once a purchase agreement is signed, buyers move on to the next stage: final loan approval. It involves submitting the agreement, property appraisal and updated financial documents to the lender for a thorough review. The lender then verifies that the property value aligns with the loan amount and that the buyer's financial situation is solid. During this time, buyers must avoid making significant economic changes, such as taking out new loans, which could impact their approval.
The timing of final loan approval is closely tied to the closing process. Typically, this approval is needed a few days before the closing date to ensure the funds are available for the transaction. Once approved, the lender prepares the closing disclosure, detailing all the loan terms and closing costs. Buyers then have three days to review the disclosure before signing the final documents.
Once a purchase agreement is signed, buyers move on to the next stage: final loan approval. It involves submitting the agreement, property appraisal and updated financial documents to the lender for a thorough review. The lender then verifies that the property value aligns with the loan amount and that the buyer's financial situation is solid. During this time, buyers must avoid making significant economic changes, such as taking out new loans, which could impact their approval.
The timing of final loan approval is closely tied to the closing process. Typically, this approval is needed a few days before the closing date to ensure the funds are available for the transaction. Once approved, the lender prepares the closing disclosure, detailing all the loan terms and closing costs. Buyers then have three days to review the disclosure before signing the final documents.
Title search and insurance
A title search and securing title insurance are key steps in closing, ensuring the property's title is free from any claims, liens, or disputes that could threaten the buyer's ownership. In Spokane, the process begins with a thorough title search conducted by a title company. The title company reviews public records, including deeds, tax records, and court documents, to verify that the seller has the legal right to transfer property ownership. The search helps uncover hidden issues, such as unpaid property taxes, outstanding mortgages, or disputes over property boundaries.
Any issues arising during the title search must be resolved before closing to ensure the title is clear. Owning a property with unresolved liens or claims could lead to legal complications and unexpected financial burdens. Once the title is clear, buyers must purchase title insurance. Title insurance protects against future claims or disputes, covering legal fees or financial losses if a problem is discovered after the sale. The one-time purchase safeguards the buyer's investment, giving them peace of mind that their ownership is secure.
Any issues arising during the title search must be resolved before closing to ensure the title is clear. Owning a property with unresolved liens or claims could lead to legal complications and unexpected financial burdens. Once the title is clear, buyers must purchase title insurance. Title insurance protects against future claims or disputes, covering legal fees or financial losses if a problem is discovered after the sale. The one-time purchase safeguards the buyer's investment, giving them peace of mind that their ownership is secure.
Escrow and closing costs
Escrow is a neutral third party that manages the funds and documents involved in the transaction. When a buyer and seller agree to a deal, the buyer deposits their earnest money into an escrow account. The escrow agent or company then coordinates with lenders, title companies, and real estate agents to ensure that the funds and documents are appropriately distributed at closing.
Buyers can expect to pay for loan origination fees, title insurance, and appraisal costs in the closing fees, which typically range from 2% to 5% of the home's purchase price. Sellers are responsible for covering real estate agent commissions, which can be around 5% to 6% of the sale price, and any outstanding property taxes or transfer fees. Both parties should review the closing disclosure, which itemizes all these costs, a few days before closing.
Buyers can expect to pay for loan origination fees, title insurance, and appraisal costs in the closing fees, which typically range from 2% to 5% of the home's purchase price. Sellers are responsible for covering real estate agent commissions, which can be around 5% to 6% of the sale price, and any outstanding property taxes or transfer fees. Both parties should review the closing disclosure, which itemizes all these costs, a few days before closing.
Crossing the finish line
As the closing day approaches, buyers conduct a final walk-through of the property to ensure the home is in the agreed-upon condition before signing the final paperwork. During the walk-through, buyers should verify that any requested repairs have been completed, that appliances and fixtures are in working order, and that the property has been cleared of the seller's belongings. It is the buyer's last chance to address any concerns before closing the deal.
After the walk-through is completed and all parties are satisfied, the final stage of the closing process begins by signing the documents and transferring ownership. During this phase, the buyer and seller will sign the required paperwork, including the deed and closing disclosure. The buyer will provide the remaining funds needed to complete the purchase, and the lender will release the mortgage funds to the seller.
Once everything is signed and verified, the title company records the deed with Spokane County, officially transferring ownership to the buyer. With keys in hand, the buyer can celebrate their new home while the seller moves forward with their next chapter.
After the walk-through is completed and all parties are satisfied, the final stage of the closing process begins by signing the documents and transferring ownership. During this phase, the buyer and seller will sign the required paperwork, including the deed and closing disclosure. The buyer will provide the remaining funds needed to complete the purchase, and the lender will release the mortgage funds to the seller.
Once everything is signed and verified, the title company records the deed with Spokane County, officially transferring ownership to the buyer. With keys in hand, the buyer can celebrate their new home while the seller moves forward with their next chapter.
Your partner in preparation
Avenue Stone Real Estate ensures that every client is fully prepared throughout the closing process. They prioritize their client's needs and goals, going beyond the basics and focusing on the finer details that many other agents might overlook. Whether catching critical nuances in contracts or providing thorough guidance through each step, they ensure no stone is left unturned.