Closing on a property is an exciting and crucial milestone in the home buying journey. After weeks (or months) of searching, negotiations, and paperwork, you’re finally ready to seal the deal and officially become a homeowner. However, closing day can also feel a bit overwhelming if you’re not sure what to expect. Understanding the process ahead of time can ease your mind and ensure that the day goes smoothly. Here’s what to expect on the big day and how to prepare.
Review of the Final Documents on Closing Day
One of the main tasks on closing is reviewing and signing the final set of documents. This includes everything from the mortgage agreement to the title transfer. It’s important to read through each document carefully before signing. You’ll likely encounter some legal and financial jargon, so if anything is unclear, don’t hesitate to ask for clarification from your real estate agent or attorney.
The key documents you’ll sign include the promissory note, which outlines your mortgage terms, and the deed, which transfers ownership of the property from the seller to you. Once signed, these documents become legally binding, so taking your time with this step is crucial.
The Role of the Closing Agent
A closing agent or escrow officer will be present to oversee the entire process. This individual ensures that all documents are properly signed, notarized, and filed with the appropriate authorities. The closing agent will also confirm that all financial transactions—such as the down payment, closing costs, and transfer of funds from your lender—are completed correctly.
In some cases, the closing agent may represent the title company, ensuring that the title is clear of any encumbrances and can be legally transferred to you. They play a key role in making sure that the process is executed smoothly, serving as the go-between for all parties involved.
Closing Costs: What to Expect
Closing is also the time when you’ll need to settle any outstanding closing costs. These are fees associated with the transaction and can range from 2% to 5% of the purchase price of your home. Closing costs typically cover expenses such as lender fees, title insurance, appraisal fees, and property taxes.
Your lender should provide a closing disclosure at least three days before, outlining all the fees and costs you’re responsible for. Make sure to review this document carefully. You’ll need to provide a cashier’s check or arrange for a wire transfer to cover these costs.
The Final Walkthrough on Closing Day
Before heading to the table, you’ll usually conduct a final walkthrough of the home. This is your last opportunity to ensure that the property is in the condition you agreed upon. You’ll want to check that any requested repairs have been made, all fixtures and appliances included in the sale are still in place, and the home is generally in good order.
The final walkthrough typically happens 24 to 48 hours before closing. If you discover any issues during this time, notify your real estate agent immediately so they can address the concerns before you sign the final papers.
Transfer of Ownership
Once all documents are signed and closing costs are paid, the next big step is the transfer of ownership. This is when the deed is recorded with the local government, officially recognizing you as the new owner of the property. At this point, you’ll also receive the keys to your new home.
The recording of the deed may take a few hours to a few days, depending on local practices, but once this step is completed, the home is officially yours. Congratulations!
What Happens After Closing?
After closing, you’ll want to keep copies of all documents for your records. These include the disclosure, promissory note, and the deed. These documents will be important for tax purposes and future reference, especially when it comes to property taxes and your mortgage payments.
Your lender will also provide instructions on how and where to make your first mortgage payment. It’s crucial to stay organized during this time and make sure that you’re aware of any upcoming deadlines or responsibilities.
Common Closing Day Delays
While closing is an exciting time, it’s not uncommon for unexpected delays to occur. These can be caused by issues such as last-minute changes in financing, problems with the home’s title, or repairs that haven’t been completed to your satisfaction.
If a delay happens, try not to panic. Your real estate agent, lender, and closing agent are there to help resolve any issues and get the process back on track. However, being proactive—such as thoroughly reviewing documents and attending the final walkthrough—can help prevent delays and ensure the day goes as smoothly as possible.
Closing day is the culmination of your home-buying journey, and while it can be a bit overwhelming, understanding what to expect can ease the process. By reviewing the final documents, preparing for closing costs, completing a final walkthrough, and being ready for any potential delays, you’ll be well-prepared for a smooth transition into homeownership. With the keys in your hand and the deal officially closed, you can celebrate the start of a new chapter in your very own home.
FAQs
Can I close remotely?
In today’s digital age, remote closings are becoming increasingly common. Many states allow for virtual or remote closings where documents can be signed electronically, and closing agents can notarize forms via video conferencing. However, not all states or lenders offer this option, so it’s important to ask your closing agent or lender early on if a remote option is available for your transaction.
What is “escrow,” and how does it relate to closing on a property?
Escrow is a neutral third party that holds funds and important documents during the transaction to ensure both parties meet their obligations. The escrow agent (who is often also the closing agent) disburses the funds to the appropriate parties and ensures all documents are properly signed and filed. Escrow accounts are also often used after closing to hold funds for future property tax and insurance payments.
Will I need to bring insurance documents to closing?
Yes, you’ll typically need to bring proof of homeowner’s insurance. Most lenders require that you have insurance in place before closing to protect their investment. Your insurance agent should provide a policy declaration or binder, which outlines the coverage details and confirms that your policy is active as of the closing date.
What happens if I need to make changes to the contract before closing?
If you or the seller need to make any changes to the purchase contract before closing—such as requesting additional repairs or altering the sale price—these changes must be agreed upon in writing and signed by both parties. These amendments are often referred to as addendums. It’s crucial that all changes are finalized, as making last-minute adjustments could delay the process or cause issues with your lender.
SC Property Inspections serves the Lowcountry with home inspection services for homebuyers. Contact us to schedule an inspection.