Homebuyers

What to Expect When You Close on a Home. It’s More Than Just Picking Up the Keys

If you’re like most people, buying a home is going to be the single largest purchase you will ever make. While the idea of handing over a check and walking away with the keys may sound nice, the reality is more complicated.

Closing on a home includes a massive amount of t-crossing and i-dotting. That means it’s a time to be extremely meticulous.

“Drama may be good for reality television, but we want our buyers to have as little drama as possible,” said New American Funding Sales Manager Stephen Moye. He’s based in San Diego

The good news is you’ve already made it to the home stretch. If you’re scheduling a closing, that means a seller has tentatively accepted your offer and you have been approved for a mortgage.

Getting through the documents, walk-throughs, and bank statements will all be worth it when you can look around a home and say it’s yours.

Here’s what you need to keep in mind as your closing approaches.

Have your documents ready

There are a number of forms that will need to be on hand for your closing. Buyers should have their proof of homeowners insurance and their loan application ready. And they need to make sure the information on both is accurate.

At least three days before closing, your lender is required to send you a closing disclosure. This five-page form lays out loan terms, closing costs, estimated taxes, and other possible expenses.

It is recommended to go over this form with a real estate agent or attorney, as the information contained in a closing disclosure can be overwhelming to the untrained eye.

Catching any mistakes in this disclosure is critical before you sign off.

“Doing the heavy lifting first is always recommended,” said Moye.

In many states, sellers are required by law to disclose any known defects or dangers in the home. Seller’s disclosures can contain notices of lead paint in the home, a history of repairs made by the current owners to address known issues, reports of water damage, foundation problems, and other structural issues.

These disclosures can be used to negotiate with the sellers or discuss potential repairs before you take ownership of the home.

Moye also stressed the importance of making sure you’re available if any questions arise. Closings move quickly and have a lot of moving parts. The quicker you respond to requests for information, documents, and other asks, the smoother your closing will be.

“In a three-week closing, you’re going to talk to us more than you might talk to your kids,” Moye said. “It should be near constant communication.”

The final walk-through before the home is yours

The last walk-through of the property is your last chance to catch issues with the home before you buy it.

You should pay extra attention to repairs the seller said they would make. You also want to make sure all the outlets and appliances work. Otherwise, you’re on the hook for a broken washing machine or microwave.

Also, make sure that all of the current owner’s belongings that aren’t included in the sale are out of the home. This is also the time to address any items the sellers took with them that you thought were included in the sale.

What to bring to the closing 

When the time comes, you’ll need to bring identification, a cashier’s check in the amount of the closing costs (or proof of a wire transfer), the closing disclosure, and proof of insurance.

You will want to make sure your name matches your government-issued ID. So, newlyweds should ensure they have ID with their new name on it.

At the actual closing, any number of people may be on hand. Agents for yourself and the seller, the lender, lawyers for yourself or the seller, and title or escrow company representatives may also be in attendance.

This depends on your situation and where you bought a home as different states may have different practices and requirements.

“The big thing is to make sure you have your money sourced, that we know where it’s coming from, and its ready to go,” Moye said.

A title search will be carried out to ensure that the seller is the current, rightful owner of the property in question.

All documents will be signed and handed over to the relevant parties.

At this point, if all goes well, you will be handed the keys to your new home. Cheers.

Stephen Moye NMLS # 268619