Getting Ready to Close on the Home Purchase: What to Expect

Closing on a house is the final, and perhaps the most exciting, step in buying a home. It is the day you legally own your new property; yet, before the congratulatory toast, some important events need to take place. From understanding the timeline to signing crucial documents and transferring funds, this guide breaks down exactly what happens at closing, especially what happens at closing for the buyer.

Understanding the Closing Process

The closing process entails the legal and financial steps that complete a real estate transaction. On day of closing, the seller transfers ownership to the buyer. For buyers, this is the time to officially enter into possession of the home. For sellers, this represents when proceeds from the sale are disbursed.

Usually, from acceptance of an offer to closing, the whole transaction lasts about 30 to 45 days, and passes through various stages for inspections, underwriting, title checks, document preparation, etc.

What to Expect at Closing

Here’s a breakdown of what to expect at closing so you can prepare in advance:

1. You’ll Be Signing a Lot of Paperwork

You will be signing a lot of legal documents, mortgage paperwork, and tax forms. The important documents may include those below:

• Closing Disclosure
• Promissory Note
• Deed of Trust or Mortgage
• Loan Estimate
• Escrow Statement
• Purchase Agreement

2. You’ll Pay Closing Costs

You have a few fees to pay, which may include:

• Loan origination fees
• Title insurance
• Prepaid property taxes and insurance
• Escrow fees
• Attorney fees and notary fees (depending on your state)

Most buyers bring a cashier’s check or wire transfer to these fees.

3. You’ll Need Proof of Homeowner’s Insurance

Lenders usually need this in place before a loan can close. Make sure your coverage starts on the date of closing.

4. You’ll Get the Keys

Unless otherwise stated in your Agreement for Sale, once all your documents are signed and funds are disbursed, you will receive the keys.

Read Also:- What Is a Good Credit Score to Buy a House?

Steps to Prepare for Closing

Knowing what happens at a house closing involves preparing for several smaller steps. Here’s what buyers should do in advance:
1. Get a Home Inspection
While it’s not compulsory, if the inspection reveals serious problems like a foundation crack or faulty wiring, you can use that information to negotiate repairs or consider walking away.

2. Hire a Real Estate Attorney (Optional)
Some states require one; others don’t. Either way, an attorney can review complex legal documents and protect your interests.

3. Buy Homeowners Insurance
Your mortgage lender will require proof of your homeowners insurance to protect their investment. Shop around to find a homeowners policy that fits your needs and budget.

4. Provide Additional Documentation to Your Lender
Your lender may ask for updates to your income, employment, or credit. Once it is requested, you’ll want to get it back to them as quickly as possible to avoid delays with your closing.

5. Negotiate Closing Costs
You can always ask the lender if there are application or underwriting fees that they can waive. You also may have the ability to choose the title insurance provider which could be a lower rate.

6. Obtain Your Closing Date
Work with your agent and lender to land on a date that everyone can agree on to close the transaction.

7. Satisfy Your Financing
Make sure all underwriting conditions are satisfied. This means a final verification of your income, appraisal of your home, and clear title.

8. Do a Final Walk-through
Usually done 24 to 48 hours before closing, this confirms that the home is in an agreed-upon condition and that any repair work agreed upon has been completed on time.

9. Review the Closing Disclosure
This document describes the loan terms and closing costs. You will receive it no later than three business days before closing. Compare it to the Loan Estimate, ensuring that they are in agreement.

What Happens at Closing for the Buyer?

Let’s zoom in on what happens at closing for the buyer:
• Verification of ID: Bring your government-issued photo ID.
• Funds Transfer: Your down payment and closing costs can be sent to us through wire transfer or by cashier’s check.
• Signing of Legal Documents: Finalize the mortgage, title, and tax documents.
• Get Homeowner Documents: This would include the deed, mortgage note, and a closing disclosure.
• Key Issuance: Unless specified differently in the agreement, you will get the keys to your home.

Common Issues That Delay Closing

Knowing what happens at a house closing also means being aware of possible setbacks:
• Low home appraisal: If the property is appraised for below the purchase price, the lender may not authorize the buyer to receive the amount financed the offer states.
• Open contingencies: If there was a problem with a failed inspection or financing issues they may take time to close.
• Title issues: Title problems like outstanding liens or ownership disputes must be resolved before the sale can close.
• Errors in the documents: Errors can occur, even an errors in your name or loan amount can lead to delays on the closing date.

How Long Does It Take to Close on a House?

The closing timeline varies, but here’s a general overview:
• Cash Deals: 1–2 weeks
• Financed Deals: 30–45 days
Getting preapproved for a mortgage can speed up the process since much of your financial vetting is done in advance.

Final Tips for a Smooth Closing
• Keep your real estate agent and your lender informed on what is going on.
• Respond to requests for documentation – remember, you do not have to be “perfect” but you do have to be timely.
• Review your Closing Disclosure carefully.
• Confirm the total amount due before sending a wire.

Conclusion

Understanding what happens at closing, especially what to expect at closing and what happens at closing for the buyer, can ease anxiety and ensure a seamless experience. From inspection to key handover, being informed ensures you are in control. By being prepared, along with the right professional assistance, you’ll soon be opening the door to your new home.