Educating buyers: What happens between signing and closing? 

When buyers — especially first-timers — think about purchasing a home, they're often focused on the search process: browsing properties, taking tours, exploring neighborhoods. But many of them may not know what happens after they find the perfect place and the sellers accept their offer.

The National Association of Realtors aims to address this knowledge gap with its latest consumer guide covering the steps between signing and closing, a phase of the transaction that may seem like a black hole to some buyers.

NAR has published more than a dozen guides for buyers and sellers since August — part of an effort to address claims made by the DOJ and consumer groups that the association hasn't done enough to educate consumers. 

During a speech to NAR's board of directors earlier this month, CEO Nykia Wright encouraged members to use these resources when working with clients: "To the extent that you all can continue to hand out those guides, we don't want to be sitting across from the government with that type of accusation in the future, even though we know internally what we do every single day."

Here's what NAR is telling consumers about the closing process:

All about escrow: NAR provides a succinct explanation of what escrow is and how it works, then describes what goes into the account, including earnest money and property documents.

Pre-closing tasks: For buyers who are financing their purchase, NAR outlines some of the key lender requirements (they also have a separate guide that covers mortgage basics). Those include getting an appraisal, doing a title search to verify ownership, and getting homeowners insurance. Buyers in some areas may want (or need) to consider specialized insurance options, such as flood or earthquake insurance, since their basic policy might not cover natural disasters. And if their down payment is less than 20%, buyers will likely need mortgage insurance.

Providing clients with a checklist of these steps can make each task seem more manageable.  

Appraisals and inspections: First-time buyers may not fully understand the difference between these types of home assessments, but NAR breaks down the purpose of each and explains what is required, and how contingencies come into play. 

Agents, NAR notes, are the best resource for finding a trustworthy inspector and other professionals involved in the home-purchase process, so be sure to have a list of recommended service providers available. Connecting buyers with the resources they need is another way agents can demonstrate their value.  

The transaction timeline: In the guide, NAR makes an effort to set realistic expectations, noting that many steps happen independently and on their own timeline. Help your buyers map out a plan, since the timing of the last step — moving in — often involves factors outside of the transaction, such as their rental lease, sale of a previous home or relocating for work.  

Closing day: Buyers will need to have their down payment ready and should be prepared to sign a lot of documents, NAR says. The guide doesn't address digital signing options, however, so encourage your client to find out if their lender supports electronic closing, which can simplify the process.