#1. Open an Escrow (A/K/A - Closing the deal in some states)
In many states, you will need to open an Escrow. This is the method where all parties deposit documents and money to a 3rd party who will handle the closing on behalf of the buyer and seller. Once all conditions agreed to by the parties are met, the 3rd party Escrow Agent will finalize the deal and disburse money to the sellers and hand the keys to the buyer. Escrows typically last about 30 days. In Illinois, the title company acts as the escrow agent for handling the closing and the "opening of escrow" doesn't happen until a couple of days before closing. All parties will bring the closing documents and money to the title agent on the day of closing and the title company agent will handle closing the transaction. Sometimes the attorneys are affiliated with the title company and they will handle the closing which can take place at the title company, the lender’s office, the attorney’s office, or the realtor's office.
#2. Lock in the Interest Rate
The price for a mortgage loan is typically expressed as “points” paid to get a certain interest rate. Points are essentially prepaid interest, so the more points paid, the lower the interest rate. One point equals 1% of the loan amount although today most loans are ZERO point loans. Locking in an interest rate with the lender ensures the interest rate and costs associated with that rate will not change for a certain period of time (lock period). A rate lock protects the borrower from rising interest rates in the period between sales agreement execution and closing (often a
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