Closing Remarks

Whether it’s called settlement or closing in your part of these United States, taking possession of your new home can be cause for celebration.  This is not just because you’ve reached your final home buying destination, but also because of the considerable journey you’ve taken to get there.

The process of closing can be a confusing one for many of us.  How do we know when the house is really ours so that we can expect the keys and garage door remotes to be handed over?  It’s likely that by now you’ve provided a passel of documentation to your lender and feel as if you’ve revealed every piece of personal information imaginable. Except, perhaps, the blood type of your first-born.  So you have a right to know how all of this will work, right?

The problem is no one bothers to explain the process to you.  Few Realtors® take the time to draw you a road map, your loan officer is concerned primarily with the final approval and any obstacles to funding the loan, and the title officer or your real estate attorney (used instead of title officers in some states) is really there at the end to hand you a pen. 

In simple terms, escrow is a neutral third party that handles all the funds in abeyance and makes sure the terms of the purchase agreement are satisfied before the seller gets their money and you get your keys.  The title company then verifies all the signed documents, makes sure there are no loose ends (encumbrances on the property must be removed and a clear chain of title must be established) and takes it all to the county to record the deed.

Let’s go over some basic steps to the closing process once everyone has said that you’re good to go (completely loan approved).

Don’t be late for very important dates!

The date you’ve negotiated with the seller of your new home-to-be as the closing date is one both you and the sellers hope to count on.  If any contingencies (conditions of the sale) have not been removed by ten days to two weeks before this date, find out if the closing date may need to be extended.  Inspections, the appraisal and your loan approval are often contingencies of the sale that have to be removed (signed off by both seller and buyer) before things can proceed.  All of these things (and more) can affect your timetable.  Failure to adhere to the timetable agreed upon can put your deposits at risk.

Assuming there are no road blocks left, it’s time to call your loan officer to find out what day would be the most logical time to sign the mountain of documents awaiting you, since your lender has to send their documents to title to be signed.  Copies of the loan documents are sent to you for review and then the rest of the title-taking documents are drawn.  The signing appointment can be set up as soon as everything is ready – even a month before close of escrow - with dates for funding and recording named by both parties.  Sounds good so far, right?  But something to keep in mind is that this is also the occasion upon which you take the remaining down payment cashier’s check with you.

Strolling through your home-to-be . . .

Most real estate contracts allow for the buyer to inspect the property they are about to purchase just before the close.  Buyers can waive this right, but most don’t.  This “walk-through” is not, however, a witch-hunt to find everything that may not be as pristine as you imagined it from your first few times seeing the house. 

When buying a re-sale (previously inhabited) house, it’s to confirm that all the items you had agreed would stay with the house (i.e. window coverings, pool equipment, etc.) are indeed still there and that the house is in a reasonable condition. 

In new construction, a walk-through is are referred to as a “new home orientation” – designed to permit your building superintendent to explain how the various systems in the house work, what your new home warranty means and possibly to point out a few paint or drywall flaws that will need more attention over the following few weeks.

The closing machine . . .

Be ready at the closing appointment with your photo IDs and a cashier’s check in the amount given to you by your escrow officer.  This will be less the deposits already made and including the closing costs you’ve already reviewed.  This is a good time to leave small children with Grandma and arrange some time away from work, as it can take up to two hours for the title person to explain the purpose of each document you’ll need to sign.

After you’ve gotten writer’s cramp signing the documents and the title person has tugged the check from your hands, the waiting game begins.  Signing, funding and recording can take place in quick succession – within a day or so.  But if your loan has funded on a Friday and recording doesn’t happen on the same day, you may be subject to paying prepaid interest for the weekend in between.  So ask your loan officer about timing the day of funding so that it’s to your advantage.  Then find out from your title person what time(s) of day recordings take place so that all is coordinated.  It would be great if someone else figured this all out for you, but in the end, all the people involved in the closing dance are there to follow your instructions.

And the lady sings . . .

Assuming possession in any form before the close of escrow - even placing a few items in the garage - leaves the seller vulnerable.  If that is agreed to, however, make sure your homeowner’s insurance is in place and put it all in writing with the seller.

In most states the words, “you are on record” coming from the mouth of your title person mean that title has now recorded in your name.  You are now a statistic in public record.  You can pick up the keys to your new home and proceed to the nearest public watering hole to celebrate.  You’ve just become a homeowner. 

If going out to toast the occasion is not a good option, then take a bottle of bubbly, some cheese and crusty bread, and spread a blanket down on your new living room floor. You deserve a pre-moving party.  After all, the real work has just begun!

--------------------------------------------------

About the author:  Northern California resident Dena Kouremetis is a 21-year veteran in the real estate industry.  Unlike some real estate journalists, she not only writes about the industry but also has spent time in the trenches of real estate sales, business development, new home construction, demographics and market research.  She has written, co-authored and consulted for several books (including Dearborn Trade’s The HomeBuyers Kit and The Homeseller’s Kit), and her articles have appeared in the pages of newspapers, magazines and online real estate venues over the past ten years.

TotalMove.com invites you to share her insights, expertise, humor and common sense whether you spend time renting or purchasing real estate -- or just like spend time reading about it.