I’ll be closing on my home next month and, I think, I have everything under control. But I’m still getting anxious about the whole deal. So, what am I anxious about?
* Buying a house. The biggest investment I have ever made.
* 20% down payment. A very large chunk of my savings is going to vanish from savings account.
* The closing table, where there will be attorneys, Realtor, builder etc. who have done this quite a few times.
So I thought I’ll get some more information about the whole closing process and what really happens at the closing table. It doesn’t matter if you are closing on a single family home, condo or a townhome. The process is similar.
Who will be present at the home closing ?
You, the buyer, will be present, along with your team, which likely includes your real estate agent and your settlement attorney. If you have an especially amiable and service-oriented mortgage broker, he may be there on your behalf as well, though that is unlikely. On the other side of the table will be the seller(s), the seller’s agent, and possibly an attorney for their team.
When the referee blows the whistle, the ball will be tossed straight up into the air. Generally, the tallest person on your team will want to do the jumping. No, wait! That’s something else. Never mind. How long will this take?
This depends on how smoothly things go. It’s likely to take about one hour for you to sign all the paperwork. (This is another reason that you do not want to go into something like this without some help. If you’ve bought the house without a real estate agent, you definitely want a good settlement attorney to be with you before and during closing.)
If there are surprises (see below) at closing, it will take longer.
What do you need to bring at the closing table?
You’re probably working with an agent, so she will be of help here. You’ll need to have in hand your new home owner’s insurance policy, showing that you have, indeed, insured the house, and a cashiers check. The settlement sheet is a document which lists all of the closing costs and the particulars of your loan.
The Passing of the Baton
The seller is advised not to cancel home owner’s insurance until recordation has occurred, which is to say, the sale of the house has officially been recorded at city hall. This usually takes place within 24 hours of the sale.
The buyer, meanwhile, is advised that he should have his homeowners policy activated immediately (but you already arranged this, didn’t you?) and he “takes possession” upon the completion of closing. What does “take possession” mean? It means the house is yours. It means that, after you’ve signed all these documents, the seller (or someone from the seller’s team) is going to place the keys to the house in your hands.
At this point, the seller (or builder, if it’s a new house) gives you whatever package of information he may have on equipment at the house. This includes things like the instruction booklet for the washing machine; information on how that timer-light above the front door works; how you re-code the automatic garage door opener; how-to manuals for the refrigerator and the food disposal. You get the idea — everything you need to work and service and understand all of the major appliances of the house.
The good news is that an overwhelming majority of closings occur without a problem. However, be sure to take the responsibility to examine the paperwork and examine it well. Ask whomever is handling the closing to explain it to you. You should be as prepared as possible for this transaction. Now is not the time to be shy or be afraid of “looking stupid” by asking a question.