What to Expect at Closing: Reaching the Finish Line

Aside from packing, one of the most stressful things about the home buying experience is having to play the waiting game. While the buyer coordinates all their tasks to complete the purchase of a home… the seller waits. You can both see the closing on the horizon (the finish line is so close… yet seems so far away) and still, you wait.

After an offer has been accepted and the mortgage lender has been given a copy of the purchase agreement, you set the closing date. And then you wait.

Why all the waiting?

Thankfully, the more you know about what happens during the closing process and the more you stay informed throughout the process will make waiting a little less painful. So, let’s help you eliminate (at least some of) the stress by helping you understand what to expect at closing.

What is Closing Anyway?

If you make it to closing, it’s almost time to jump for joy! This is the final step in the purchase process; also referred to as settlement (in the eastern part of the U.S.). It’s at this time when the big contracts come out and you’re required to “sign your life away.” Not really, but this is when ownership is transferred from the seller to the buyer, money exchanges hands and a buyer’s new life as a homeowner begins.

But there are a few things that need to happen before getting to that point. Namely patience.

Getting to the Closing Table

Once the seller accepts an offer, many buyers think they’re “home free.” Not quite.

Always expect the unexpected. For example, being pre-approved for a mortgage loan is not a guarantee; things can still go wrong and unfortunately, you can still be denied by the lender. Avoid any major purchases during this period; major reduction in assets could hurt your final approval status.

Be prepared for anything. Your actual closing costs may also be different from the initial estimate; the HUD-1 statement can give you a more accurate number of your final costs.

Get organized. Make sure you have a homeowner’s insurance policy in place, gather every document received throughout the home-buying process including original purchase contract and inspection.

Once the buyer’s loan is funded and the down payment is received at the escrow company, it’s finally time for the close. The day before closing read everything in detail; by law you have the right to review the closing settlement statement, or the HUD-1 form, at least 24 hours before closing. If a document doesn’t look familiar, ask questions until you feel comfortable with everything. Trust your gut. This is a big moment; make sure you know what you’re signing.

Additionally, it is also standard to be allowed a final walk-through inspection the day before closing to determine if any damage was done to the property in the time between contract and closing. At closing time, negotiate any necessary repairs.

Sitting at the Closing Table

If you’ve made it to the closing table, this is an exciting moment! But before you jump for joy, a few things are left to address before you sign your name across the (many, many) dotted lines.

Closing day is when all parties officially “seal the deal” and the property is transferred from seller to buyer. This is also an opportunity to make any last-minute changes to the transactions… which can slow the process.

“To expect the unexpected shows a thoroughly modern intellect.” ~Oscar Wilde

Processes vary from state to state, but traditionally in the eastern part of the U.S. a standard closing usually takes one to three hours (and that’s without any changes). Everyone is present at the closing include the buyer, buyer’s real estate agent, seller, seller’s real estate agent, title company representative, transaction attorney or attorneys for both sides and the closing agent who conducts the meeting and makes sure all documents are signed, fees and escrow payments paid.

In most areas of the western portion of the U.S. all of the paperwork is signed in advance, money is wired and the escrow company ensures that everything is recorded properly.

What to Expect At Closing Time

Once all of the paperwork has been signed successfully, the seller hands over the keys to the agent for delivery to the buyer. Phew.

Just a few things left to set yourself up for success as a new homeowner. Double check that your closing packet includes all important documents exactly as you received it, change your address on all necessary documents, revise your budget (if you haven’t yet) and review your homeowner’s insurance policy.

Congratulations! The wait is finally over.