Welcome to the world of real estate! Whether you're looking to buy or sell a property, understanding the closing timeline is key to a successful transaction. In this article, we will take you through the journey of the closing process step by step, and make it an enjoyable learning experience.
DAY 1 – The Offer is Accepted!
- The seller executes an Offer to Acquire (‘Offer’) to sell the property.
- The purchaser executes an Escrow Agreement with the ‘Escrow Agent’ and Escrow Company.
- The closing coordinator receives a copy of the purchaser's and seller's US passport(s) and driver's license(s), as well as KYC forms, Privacy notices forms, and other required documentation.
DAY 2-14 – The Due Diligence Period
- The purchaser deposits the agreed-upon Initial Deposit (usually $5,000 to $10,000 USD), plus escrow fee into escrow within three (3) business days of acceptance.
- The purchaser's realtor submits the fully accepted offer, escrow notification letter, Purchaser and Seller’s IDs and all Seller’s ownership documentation to the Closing Officer and or Closing Company.
- The closing officer and/or closing company works with the purchaser and/or purchaser's legal or fiscal counsel to determine how the purchaser will take title of the property, as well as work through all due diligence requirements and conditions established within the Offer.
- The realtor works with both parties, including the closing company and/or lawyers and/or closing officer, seller and buyer to remove any contingencies, finalize inspections or inventories, etc., to remove all conditions that would delay the Earnest Money Deposit.
DAY 15 – End of Due Diligence Period
- The purchaser executes the Escrow Agreement, a standardized agreement with the Escrow Company.
- The purchaser funds the Earnest Money Deposit, as indicated in the Offer. This deposit should be the full Earnest Money Deposit, less the Initial Deposit.
- The purchaser additionally deposits the PRE-Closing Costs Fee
- Should the purchaser not deposit the Earnest Money Deposit, the broker will provide notification to the realtor(s), Escrow Agent, purchaser, and seller, and the purchaser shall have days to "cure" (deposit).
DAY 16 – 80 – Transfer of Title
- The purchaser and seller submit all pending documentation to the Closing Company, Closing Officer and/or Notary to complete the Transaction File to be submitted to the Notary and Trustee Bank.
- The Notary will prepare a Capital Gain Tax estimation for the Seller's review (this is normally done before OFFER ACCEPTANCE).
- The Notary's office will prepare the Trustee Bank Instruction Letters to be signed by both Purchaser and Seller.
- The Notary and Trustee Bank will process the transaction.
- The Notary's office will prepare the deed of title to be signed on behalf of the purchaser and seller at closing, so neither the purchaser or seller need to be present.
- The transaction will be completed, and the purchaser's investment will be protected.
Day 85-90: Closing Day
- After signing the final settlement statement, the Purchaser will fund escrow with the balance of the purchase price and closing costs. Once the funds are transferred, the Notary finally transfers the title, and all funds are released, completing the transaction.
Congratulations, you are now a real estate closing expert!
By understanding the different stages involved in the closing timeline, you have taken an important step towards a successful real estate transaction. If you have any further questions, don't hesitate to reach out to a knowledgeable real estate agent. Remember, buying or selling a property should be an exciting and fun experience, and we hope this article has helped make it so for you.
