You have found your dream home and now it is time to close the deal. You’ve spent a lot of time searching and negotiating that it seems like the end should be a breeze. But what really happens during the closing process? The first step is getting to the closing table. Assuming everything is in order, closing day can be uneventful, but there are some things to keep in mind before you reach that big day!
Scheduling Your Closing
Buying a home is an exciting time, so it’s not at all surprising that many people try to schedule closing as early as possible. This is not always best because scheduling on the last day of the month can lead to unplanned issues. You might want to give yourself a few extra days, in case something goes wrong so you aren’t surprised with unexpected fees for a mortgage that is pushed to the following month.
Taking a day or half day off work is also a good idea. Trying to pack a closing in during a lunch hour or at the end of the day doesn’t usually work out well. Most problems can be easily fixed, but can drag on if you must rush out the door to get back to the office.
What Could Go Wrong?
A common issue during closing is some typo or error in the documents. This could be a misspelled name, incorrect house number, and it could also be an error in the loan amount. While this can be corrected, a simple mistake can lead to delays, which is why it is so important to read through each document before signing. It is good to ask to review paperwork as early as possible.
Because there are multiple parties involved with a closing, you may need to take the lead when it comes to contacting everyone before the closing. Several days before your closing, check in with your closing agent to make sure that they have everything they need. Problems do arise, but few are unsolvable. The sooner you catch an error, the better, so keep in mind that you may have some last-minute work before closing.
Pre-Closing To-Do List
Now that you know about some of the potential closing day problems that new homeowners experience, you will review all your documents prior to your big day. Along with making sure that all the paperwork is in order, you will also want to make sure that there are no unexpected glitches with the house.
Buyers are usually permitted to do a final walk-through of the home 24 hours before the closing. If given the opportunity, take it. This will allow you to determine if any damage was done to the property between contract and closing so that you can negotiate repairs with the seller. Go to the walk through with a thorough understanding of expectations. For example, if light fixtures and fans were to stay, but they were removed, this is not acceptable.
You will also want to make sure your credit remains stable, if you attempt to open or close a line of credit right before your closing, it can negatively impact your credit rating and cause unnecessary issues with your lender. This can delay or even prevent the sale from closing.
Finally – Closing Day
Every closing varies a little bit, but for the most part the seller along with their real estate agent will sign first. One thing to note is that signing docs at the title company typically happens the day before closing. When you sign at the title company, the escrow officer (closing agent) the lender and your Realtor will be present. Each party will be asked to sign specific documents which will transfer the property ownership from the seller to the buyer.
The buyer will receive the keys, unless another arrangement has been negotiated the day of closing, typically the day after signing papers at the title company. The buyer will also pay any remaining funds toward their down payment via a wire transfer when signing and a representative from the title company will record the transaction by 5:00PM the day of close.
Problems do arise, but most are preventable. It is completely acceptable to ask questions before, during and after the sale. Experienced real estate agents can guide you through the process, from the moment you decide to buy a home until you lock the doors before the first night in your new place. Do not be afraid to ask, if you are ever unclear during the process. It is all worth it in the end!