Buying a home can be equal parts exciting and stressful, so when the time comes to close on your new home you want the process to be smooth and without any last-minute delays. While your real estate agent will guide you to a successful closing, there are a few things that you should know—and can do to prepare—to ensure that at the end of the day you are a happy new homeowner.
Who will be there?
The closing agent is a neutral third-party person, oftentimes a title officer, an escrow company officer, or an attorney, who is trained to ensure that everything related to your closing is completed correctly and successfully. You and the seller likely agreed on who the closing agent would be as part of the original offer on the home. In addition to the closing agent, you may also have your real estate agent or an attorney present.
What Should I Bring?
Much of the legal paperwork will be prepared in advance by the real estate agent, lender, and title officer, but there are still a few items that you are responsible for bringing to closing:
- Photo ID: Your signature will need to be notarized multiple times throughout the closing process, so you must have a valid, state-issued photo identification with you.
- Financing:: You are responsible for having the downpayment and closing costs available at the time of closing.
- Homeowners Insurance: If you will be purchasing your new home with a loan, the lender will require you to furnish a certificate of homeowners insurance for the home. Your lender also may require wind, flood, or earthquake insurance, too, depending on where your home is situated.
- Final Purchase Contract: You may want or need to check details in the closing documents with the original contract, so having it with you is always a good idea.
What occurs during pre-closing?
During pre-closing, a closing date is set and all of the paperwork for the sale is collected. This includes the deed, title insurance, lender forms, and copies of all documents necessary to close the sale. The buyer is provided with the final cash figure needed for the closing, usually in the form of a cashier’s check. The buyer is responsible for performing a final walkthrough just before closing to ensure that the property is in the agreed-upon condition before the sale is finalized.
What happens at the closing?
Once all of the closing documents have been approved, a date and time to close the transaction is scheduled. At the closing, the closing attorney oversees all aspects of the closing of the purchase and sale transaction and answers any questions the parties may have which relate to the transaction and the closing documents.
As a buyer, you will have two primary responsibilities at the closing:
- Sign legal documents – a lot of them! The seller signs the deed and the other seller documents, the buyer signs the buyer’s documents and the loan documents (if the transaction is being financed), and both parties sign the HUD-1 settlement statement.
- Pay closing costs and escrow items: There are a number of fees associated with getting a mortgage and transferring property ownership, including property taxes, utilities, and HOA fees. The funds are usually a certified check or cashier’s check made out to the escrow company or a wire transfer of funds to the banking institution.
After all of the documents are signed and payment is given to the seller, the buyer takes possession of the keys and officially becomes the new owner of the property. After the closing has occurred the seller, real estate agents, attorneys, and other parties to the transaction are paid and certain documents are sent to be recorded in the county in which the property is located.