Surviving the Closing

You’ve gotten your pre-approval. You’ve found your dream home. You’ve made the offer – and the seller accepted it! There are so many things to do, so much paperwork…so much anxiety. If you’re like most people, you’ll find yourself questioning and second-guessing your decision. This is normal for all large purchases. And, buying a home is the largest purchase – by far – that most people will ever make. But don’t worry; if you’ve done your homework throughout the home-buying process, then you’ve probably made sound decisions.

So, it’s time to turn your attention to the approaching culmination of your journey toward the American dream, the closing. Very few events simultaneously evoke such anticipation and nervousness. Just as with every other step in the process, however, knowledge of what to expect and preparation can diffuse a large amount of the apprehension which normally accumulates.

What happens at the closing, exactly? Well, very simply put - all the final papers are signed and all of the necessary “up-front” money changes hands and is dispersed appropriately. Then the title and keys to the property are handed from the seller to the new homeowner. But since things are rarely as “simple” as they're often made to sound, let’s take a slightly more in-depth look at just who and what are involved in the average closing.

Local laws and traditions will generally govern many closing procedures. The closing may take place at a bank, a realty agent’s office, or at a title or escrow company office. Buyers and sellers may or may not be accompanied by their agents. An attorney or other officer may act as the closing agent. The primary items that are involved at the closing will be:

• the Purchase Order contract between buyer and seller
• the loan documents, which will include the Note and the Mortgage contract
• the Settlement Statement, which shows the exact amount of money needed at closing and its disbursement
• the Homeowners Insurance document
• the Title Insurance document
• the Title (or Deed as it is called in some areas)
• Certified Checks for the down payment and closing costs, and
• Other documents as needed for the characteristics of the particular transaction.

All of these documents should be reviewed by the buyer before the day of closing. This is to ensure that there are no surprises at the last minute, and if there are clarifications that need to be made or mistakes that should be corrected, there is time left before the actual closing in which to do so. It should be noted that the Settlement Statement is the document which shows each party exactly how much money they must have with them at closing to complete the transaction.

Another very important part of the process that should not be overlooked is the final inspection or “walk-through” of the property no more than a few days before the closing date. This is to ensure that the house is in the condition that you expect it to be in according to your contract with the seller. You don’t want to move into your new home after you’ve closed and find that all of the windows and doors are missing, for example. And one more thing - refrain from making any large purchases or any other financial moves (such as changing jobs, etc.) while your closing date approaches. Such occurrences could affect your situation in the eyes of the lender (they've been known to pull a last-minute credit report just to make sure that all is still well).

As always, do your homework. If you have questions or concerns, ask the professionals that you’re working with. With the proper preparation, your closing will proceed smoothly and effortlessly, and the next stop that you’ll be making will be your new home.