THE BUYER CLOSING GUIDE
A step-by-step road map to closing on a home in New Jersey
WHAT DOES IT MEAN TO “CLOSE” ON A HOUSE?
So you found the right house. Great! But what happens next? How do you get from offer…to actual ownership?
The answer: the closing process.
In New Jersey, the closing process begins with the parties’ signing of the Contract of Sale, and ends with the actual closing itself, when you (the Buyer) become the owner of the property.
Along the way, various contingencies (mortgage, inspections, and title, to name a few) and other contractual obligations need to be satisfied by you and/or the Seller in order for the transaction to keep moving forward. And, of course, there’s all manner of tasks and “to do” items to take care of in preparation for the closing and your eventual move.
By the time you’ve made your way through the closing process and arrive at its culmination — the closing itself — you have a clear idea of what you’re buying and access to the money to pay for it, and you and the Seller have readied all the legal requirements for the transfer of ownership of the property from the Seller to you.
THE 7 PHASES OF THE CLOSING PROCESS
Understanding where you’re at in the closing process — and what’s coming next — will go a long way toward ensuring you have a smooth, efficient and happy home buying experience.
To get oriented as you embark on your journey to the closing table, think of the closing process in New Jersey as the series of seven phases shown in our Closing Road Map and described further below. From there, you can get access to detailed information explaining the “who, what, when and why?” of each phase, including step-by-step checklists to get you through the closing process from start to finish.
Your real estate agent presents your offer to the Seller through the Seller’s real estate agent. The Seller either accepts the offer, rejects it, or responds with a counter. If the Seller accepts the offer, a Contract is formed between the parties, and the attorney review period begins.
You and the Seller have your respective attorneys review the Contract and exchange letters proposing changes to the Contract that will better protect each party’s interests. Those proposed changes are negotiated until an agreement is reached as to all terms of the Contract, at which time the Contract becomes binding.
You select a lender and apply for your mortgage loan, which involves the submission of numerous financial documents. The mortgage approval process involves several stages and is ongoing until the closing itself, when the loan documents are signed and the loan is “closed,” so that the loan funds can be used to complete the purchase of your new home.
You enlist a licensed home inspector to inspect the property for physical and environmental defects, including structural, mechanical and safety issues. Through their respective attorneys, the parties negotiate who will be responsible for repairing any defects.
A licensed title insurance provider will examine the title (ownership) history of the property in the public record, to make sure you’ll have clear title to the property at the closing and can obtain a title insurance policy to protect your ownership rights going forward.
PREP FOR CLOSING
Any loose ends will be tied up in anticipation of the closing, and the deed and other closing documents will be prepared. You’ll perform a final walk-through of the property just before the closing to ensure that any agreed upon Seller repairs have been completed and the property is in the same condition as existed during the Inspections phase.
The closing consists of both a mortgage loan closing and a title closing. You sign the loan documents to close the loan, making available the loan funds for the purchase of the property. The Seller receives payment and provides you with the deed, which legally transfers title to the property to you.