So, you've bought a house! This is an exciting time in your life that you're undoubtedly very happy for. But you still have questions, right? You've looked at house after house and finally put in an offer, and even better, the owners accepted it!
But what comes next?
There's a lot that goes on after you make the decision to purchase a house. Today, we're going to take a minute to talk about what to expect on closing day.
If you're looking forward to the day you get to walk away from the table with your new keys in your hand, keep reading to learn more!
On The Path to Closing
Before we can get into talking about what to expect on the closing day, let's talk about what leads up to that.
Your loan is still in underwriting and you are probably getting requests for documents that seem just plain random.
You have one job during this time. You need to quickly get ahold of whatever documentation you are being asked for and get it to where it needs to go. No matter how strange the request may be, honor it.
This is the only way you can be sure to get to hear the three sweetest words in the world -- clear to close.
Also, make sure you and your realtor take a walk through the day or morning before the closing. If there's still a lot of stuff in the house or if the things on the inspection weren't completed, that's a huge red flag.
Where Does the Closing Take Place?
Now that you're clear to close, it's time to get that process underway. So, where should you go for the big day?
Usually, you will conduct a closing with the company that issued the title policy for your new home. This is because it's a neutral place and it has access to the different things you will need during the process, like email and fax.
Who Has to be Present?
In most cases, there are only a few people there on the closing day. However, you (the buyers), the sellers, the title rep, the realtors, and the lender can all show up too.
There will also be a closer there to ensure that everything is talked about and explained. He or she will also ensure that you are signing all of the correct documents.
There are a few other closing day situations that could arise if your situation calls for them. Maybe the sellers already completed the paperwork, so they won't be there. Or maybe you're involved in a closing that is done through the mail. It all depends on your circumstances.
However, most of the time, everyone sits in one room together and talks and signs papers.
When is Closing?
When you initially make an offer on a home, you are agreeing to a closing date. It's written in the contract and you are agreeing to a contractual obligation when you make that offer.
Typically, this can be from anywhere between 30-45 days from the day you made the offer.
What Documents Do We Have to Sign
On closing day, there will be two packages of paperwork. You will have to look over and sign the buyer's paperwork and the seller will have to handle the seller's paperwork. Usually, the seller will go first.
This is because they need to give up the rights to their property before you can take ownership. Also, they've usually got less to sign.
This is usually the part of the process where the closer sets about getting your loan information verified. Your closing cant is official until those funds are verified.
The documents you have to sign should look like your last set of mortgage disclosures. And expect to sign a lot of them. Like, 50 pages a lot. Expect it to take about an hour or maybe even more, depending on how smooth things wind up going.
All of this will probably take some time. While you wait, talk to the previous homeowners about anything they think you might need to know about the home and the neighborhood you are going to be living in.
Once those documents are signed and faxed and your loan is fully funded, you're a new homeowner!
Some Surprises Along the Way
Now that we've gone over the general closing day practice, let's talk about some of the surprises that could pop up on closing day.
The Walk Through Went Poorly
If you're going to have an unpleasant surprise on your closing day, this is going to be it. There's a small window of time between the final walkthrough and your closing day, so you have virtually no time to prepare for a problem.
And rest assured, if something could go wrong in the last minute before closing, it will.
If there's a huge issue, like a flood, you should take a step back and reexamine the situation. Did you inspect the home thoroughly before the walkthrough?
Even if the issue is pretty big, it doesn't have to be a deal breaker. Ask the seller to repair it on their dime and put money to repair it in escrow.
What Comes With the House?
Another big question is what stays and what goes with the sale.
Here's the thing. Unless you put it in writing that the item you want is supposed to stay, it's not yours. And if you want the deal to close, you should let it go.
Make sure you don't run into these misunderstandings by creating a contract about what the homeowner will leave and what they will not. Be detailed about it.
What to Expect on Closing Day
Despite how exciting this time can be, it's going to be a stressful day. You're going to have a certifiable mountain of paperwork to do and you're making what is the biggest purchase of your entire life. It's better to know what to expect on closing day before you go into it.