When you’re buying a home for sale in Lakewood, Long Beach or anywhere else, you’ll have to get to know some common closing terms before you sign the dotted line. This quick glossary of closing terms can get you started - but if you have a question about anything that you see (or don’t see) here, call us and ask! We’ll be happy to give you the answers you need.
Closing Terms You Need to Know: Real Estate Glossary
Cash to Close
Cash to close is the total sum of money you need on closing day. It’s usually between 3 and 6 percent of the home’s total price.
A closing disclosure is a document the seller has to provide you with that outlines issues the seller knows the home has. It won’t include every issue - just the important ones that could affect the home’s value. (Read Why You Should Read Property Disclosures Thoroughly for more information.)
COE stands for close of escrow. It’s the date that you officially become the owner of your new home.
Contingencies are justifications that let you get out of a purchase contract.
Earnest Money Deposit
Your earnest money deposit is the funds you put down to show the seller that you’re serious about buying his or her home. The earnest money deposit is typically between 2 and 5 percent of the home’s cost.
Escrow is the “holding area” for your earnest money deposit and important documents.
Prorations are divisions of certain fees or taxes to match up to the time you own the home as opposed to the time the seller owned the home. For example, if you buy a house in June, you’re only responsible for paying property taxes on the home from the date you bought it through the end of the year.
Title insurance is a form of protection against other people claiming ownership of the home you’re buying.
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