What a Buyer Should Expect During the Closing

The last step in the home buying process is commonly referred to as the closing. The close of escrow is when all steps—from acceptance, title search, inspection, mortgage approval, and so on— come together in a final transaction. Documents are ready to sign, the buyer is ready to hand over the purchase price and the seller is ready to transfer title. And most importantly, the keys!

homebuyerIt usually takes about an hour and may be attended by some or all of the parties involved: buyer, seller, real estate sales professional, attorney and title company representative. The buyer reviews and signs the loan and real estate documents and pays for the property, closing and other costs.

Assuming that the funds are in order, the deed is correct and the title is clear, the final step is the disbursement of funds to the seller. The title company should have the funds in its possession, but the buyer needs to bring a cashier’s or certified check for the down payment and the closing costs if it was not included in the mortgage loan. If the buyer’s annual real estate taxes and homeowner’s insurance will be paid through the lender, an escrow account will also be established.

Once all the papers are signed and funds are disbursed, the buyer receives the keys and is now a homeowner.

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Is it worth the cost?

A stressful part of putting your home on the market is trying to figure out what to fix and upgrade to get the very best price. An experienced agent will recommend projects to consider and ones to avoid. After all, just because you put money into a renovation project doesn’t mean you will recoup the money in a sale.

Male Contractor in Hard Hat Discussing Plans with Woman in Room.

You may also want to consult Remodeling Magazine’s annual Cost vs. ValueReport for a breakdown of typical returns on renovation projects large and small. The  24th annual edition published earlier this year contains input from some of the country’s top remodeling professionals and ranked 35 remodeling projects for highest returns.

In many cases, smaller-scale renovation projects recoup more of their initial cost than larger, pricier ones, according to the report. For example, a minor $20,000 kitchen upgrade returns 72.8% of renovation costs, but a more expensive $58,000 kitchen remodel only retains 68.7% of its value on resale.

Surprisingly, the report noted that exterior upgrades recoup more of their costs than interior renovations — a trend that’s been building for the past five years. What’s the hottest exterior upgrade according to this year’s report? Replacing the front door with a steel entry door, which typically returns more than 100% of its cost.

The report also lists garage doors as a wise investment, returning up to 83% of their original cost when the home sells.  Other prudent outdoor renovations include siding and window replacement, returning 80% and 72.4 %, respectively.

Interior improvements retaining the most value include attic renovations and basement remodels, recouping 72.2% and 70%.

“Just like an addition to the home, an unfinished space—such as the attic or basement—will instantly add value and livability to your home, as it increases the square footage and changes the way your family lives in it,” said Will Tomlinson, owner of North Carolina-based greyHouse Inc. Renovation and Remodeling. “You will be transforming a space that likely gets very little use into a fully functional area for your family to enjoy.”

The report also notes that non-essential features have less resale value. Sunroom additions recoup only 48.6% of renovation costs; home office remodels, 45.8%; and backup power generators, 48.5%.

Of course, homeowners’ needs and budgets dictate their choice of home-improvement projects. Still, it helps to know projects’ cost vs. return ratio when making the final decisions.

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