The final step in a real estate transaction is called the closing. When you are buying a house, this is when all the papers are signed and the ownership transfers into your name. If all goes well, you walk out with the keys to your new home! If you have never purchased property before, the closing process can seem a little intimidating. If it has been awhile since you bought property, a lot has changed.
After all the contingencies have been met ( all inspections completed satisfactorily, the appraisal completed and your financing has been approved) you are ready to schedule your closing. Your closing will be scheduled on or before the closing date you agreed to in your contract. Until that time, the seller still owns and will probably retain possession of the property. Keep in mind that you are usually unable to move anything into the house until after the closing. When you are preparing for your move, make sure you have scheduled movers for sometime on after the closing date.
Besides scheduling the movers, you will also need to have all utilities put in your name. This includes gas, electric, water & sewer, cable, phone and internet, if you wish to have them. Usually, you need to have all the utilities put in your name as of the date of closing. Make sure you allow enough time for the transfer to occur- at least a week before you should have this done. Also, some companies may require a deposit if you have never had service in your name. You will also need to have homeowners insurance effective the date you close. If you are getting a mortgage, your lender will require the first year of insurance to be paid for prior to closing.
Sometime within 48 hours before the closing, you will have the opportunity to do a final walk-through of the home you are purchasing. Your Realtor will schedule this and accompany you on the walk through. At that time you want to make sure the property is in the same condition that was when you made the offer. Make sure all personal property listed in the contract is still on the premises. This includes any appliances, window coverings, air conditioners, etc. that you agreed would stay in the home. Also, make sure everything is in working order. Turn on the furnace and/or air conditioner to make sure they are working properly. Flush the toilets and turn faucets on and off to check for leaks. Remember, this will be your last chance to make sure everything is acceptable because once you close, you own it! If there are any problems, make sure your Realtor and/or attorney contact the sellers and try to rectify the situation.
Usually 24 hours or so before the closing you will get a HUD statement. This is an itemization of all your charges and credits for the purchase. The ìbottom lineî will be the amount you need to bring to the closing. You cannot use a personal check it must be a cashierís check made out to the title company where you are closing. If the amount is $50,000 or greater, the money will need to be wired directly from your bank. You will get wire instructions with the HUD statement if you need to wire money.
Typically, your closing will take place at a title company. The title company will issue title insurance for your property. This is insurance that guarantees the title is free from hidden claims and liens and is part of your closing costs. If you have an attorney, he or she will be there to explain and approve all the closing documents. If you are obtaining a mortgage, your lender may also be present. Your Realtor will be there as well. The closer for the title company will explain the documents to you as you are signing them, unless you have an attorney and then they will review them with you. You will be signing mortgage documents, if needed, as well as the final HUD statement, name affidavits, authorization for the title company to take in all the funds and cut checks and any other documents necessary to close the transaction. The seller will most often be there as well. They will be signing their documents including the deed which actually transfers ownership. You will need to provide a driverís license or state ID to be photocopied to verify your identity.
At the end of the closing, you will receive copies of everything that you signed for your records. The actual deed will need to be recorded and you will receive a copy of it in the mail once that is done. The seller will give you any keys and/or garage door openers he has for the property. It is usually a good idea to get the locks changed as soon as possible. The process generally takes 45 minutes to an hour, depending on whether or not you are getting a mortgage and what kind. When you are finished, you are a homeowner! Time to move in and enjoy your new home!