The process of buying a home can be overwhelming! Understanding all the real estate jargon and all the parts of the month-long process are incredibly challenging. While closing on your home is the end of the process there are items you need to be aware of prior to that important date. Here’s the most common questions and their answers:
1. What is Closing?
Closing is the legal transfer of property ownership. You may also hear it called settlement. Ultimately this is the process where the home becomes yours! You may have seen these past few years where the sellers ask you to stay in the home after the closing date or retain possession of the home and may or may not pay rent to you as you now legally own the home.
2. Where does Closing take place?
Closing will typically be held at the title company’s office where you and the seller have decided during the negotiation of the contract. The title company will confirm the current legal owner of the property and research any liens, mortgages, unpaid taxes, judgements, or anything that may affect the sale or transfer of the property. This process helps to identify any problems that must be corrected prior to your receiving title to the property.
3. Who attends Closing?
Most of the time closings are done in person with all parties who signed the contract. Although sometimes a person may not be able to attend and can sign their documents via a remote process of the title company. Your buyer’s agent can provide additional details for your unique circumstance. Attendees at closing can be you and your agent, the sellers and their agent, and any party’s attorney if they have one. Also in attendance is the closing agent, title insurance agent, and escrow agent, however most often these roles are fulfilled by one person handling various aspects of the closing process.
4. What do I bring to Closing?
Your title company will advise you of exactly what to bring but most often you will need a cashier’s check or wired funds for the closing costs payment. proof of your homeowners insurance policy, and 2 forms of legal photo I.Ds.
5. What happens at Closing?
Get your signing hand ready! You’ll sign many documents in front of a notary, usually the closing agent. They may include some of the following:
Mortgage note – a legal obligation to repay the lender according to stated terms
Closing Disclosure – statement of your final mortgage loan terms and closing costs
ALTA – – details all fees and charges the buyer and seller
Truth-in-Lending Act (TILA) disclosure statement – a final summary of the terms of your loan
A Deed – the legal transfer of ownership
Affidavits – any binding statements by the buyer or seller.
Once all the necessary documents are signed and all required monies have been paid, possession is transferred, and you receive the keys to your new home. The title company will make sure the title is transferred correctly at the county recorder’s office which may take a few to several days. Always remember to keep your closing documents in a safe place as you will need them in the future. Check with your tax preparer as some of the expenses paid might be tax deductible.