What is involved during the pre-closing?
The pre-closing is the timeframe when all the conditions of the contract need to be met. You will want to check in with your agent to monitor the buyers’ progress. Stay informed about any issues that may come up untill you close escrow.
Following are the typical items that must be completed prior to the close of escrow. You may have additional contingencies outlined in your purchase contract.
Financing: The financing contingency is the most common contingency not met by a buyer. This is why you want a pre-approval letter included with the offer. Assist the buyer by providing any additional property documentation they might need to provide the lender.
Appraisal: Part of the loan process requires an appraisal of the property. Generally the lending institution sends an appraiser to evaluate the property’s value. Work with the buyers’ agent to schedule the appointment. At the end of the process you will receive an appraisal report which is a written detailed estimate of the property value.
Inspection: A home inspection is generally a contingency in the buyer’s contract. If the buyer is getting a loan, the lender will require it prior to funding. At the end of the inspection you will receive an inspection report.
Title search: A title search ensure the title of the property is free and clear. The lending institution requires a title search before issuing the loan. The search is conducted by a title company who will issues a title report. This report identifies the current owner of record, the estate under which the title is held and all the encumbrances of record affecting title. If there are any liens or lawsuits you must clear them up prior to closing.
Paid Assessment Letter: As a resident of a condominium your association may require you to get a letter from the board of directors stating you have paid all of your assessments to the association through the closing date.
Loan Payoff Letter: If you have a mortgage or home equity loan, you will need a letter from the lender(s) stating how much you own on the loans through the closing date. The lenders will be paid out of the disbursement of funds at close of escrow.
Walk Through: The buyer is entitled to a final walk-through of the property prior to signing the closing papers. The walk through should be scheduled as close to the closing as possible, preferable after you have moved out.
Move out Date: To avoid problems at closing you want to move out before the close of escrow.