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faq
After the searching for a home is done, the
negotiations have been completed, the house has been inspected, and the mortgage
has been applied for and committed to, the focus suddenly turns to the Closing,
Settlement, or Escrow as it is known in some
localities. For simplicity, in our discussions here we will refer to the
process when it all comes together and you finally own the home as Closing. An
understanding of the elements of and players in the closing, as well as a
concise preparation for it, will eliminate many nervous hours as the day
approaches.
What is involved?
It is the proverbial "signing on the
dotted line:" the process of which will put the title to the house in your
name, verify homeowners' insurance on the property, commit in writing to the
terms of the mortgage, and usually, put the keys to the house in your hands. In
general, you will leave the closing and go to your new home as a homeowner. The
weeks and months of anticipation are all settled in the short amount of time
that you spend at the closing.
Closing procedures will vary from locality to locality. In some areas, the
buyers and sellers (as well as their Real Estate Agents) will all attend the
closing. In other areas, only the buyers will be present. The closing will take
place at the office of an Attorney, a Title Company, or an Escrow Company
(again, there is some variance here based on your local laws and tradition). In
general, though, the closing will be attended by all of the buyers involved and
their Real Estate Agent, as well as the Closing Agent, who has reviewed all of
the components of the house sale and who is the one who will say "sign
here" more times than you have ever heard in your life.
What forms are involved?
Although there may be additional documents
involved, the primary items which are dealt with at the Closing are:
 | The Settlement Statement
| The Contract
| The Loan Papers
| Title Insurance
| Homeowners Insurance
| The Title or Deed
| The Down Payment and Closing Costs |
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The Closing is your final opportunity to make certain that everything related to
the purchase of your home is correct. It is important, therefore, that you do
adequate preparation prior to the day of Closing. Although your Agent will most
likely review all of the items needed with you, it is a good idea to have the
right information in case you need to handle it on your own.
What items will we need?
The following are the most important items
that you will need prior to or at closing and some hints regarding them:
A Closing cost estimate: This should first be given to you by your Agent
at the time of the contract, and then given to you by the Lender, a Good
Faith Estimate, shortly after the application for the loan. This should give
you a reasonably close estimate of funds you will need at the time of closing.
Homeowners' Insurance Policy: This must be secured prior to the date of
closing.
Settlement Statement: You should have a copy of the Settlement
Statement before the date of Closing. Generally this will not be available
until one or two days prior to the actual Closing, but it is important to have
it because it gives you the total amount of cash you will need at Closing and
also how those various funds will be dispersed. In addition, it gives you an
opportunity to iron out any discrepancies prior to sitting down at the Closing
table. Your Agent should also have a copy for review.
Start asking for the settlement statement 4 or 5 days before the scheduled
closing. This will save you having to chase it down the night before your
closing.
Certified Funds: On the day of Closing you will need certified funds for
closing costs and down payments. This is an important reason for needing a copy
of the Settlement Statement a day or two in advance--so you know the amount of
funds needed and so that any problems can be handled in advance.
By making adequate preparations in advance, you will be far less likely to have
nasty surprises when everyone--especially you--is ready for closing.
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