Buying a home
Brilliant question! If you’re buying a home for the first time, you likely have no idea of what to expect at a Real Estate home closing. And, nothing is worse than not knowing what’s ahead. Or perhaps, it’s been 5,10,15 years or more since you bought your last home and really can’t recall what happened.
Knowing what happens at a Real Estate home closing is such an important part of the complete home buying process. And, as I’ll always recommend, it’s critical that you are prepared when buying a home. Preparedness will always make you win in the end.
Let’s go over the steps of what happens:
Review your Closing Disclosure
With the advent of the Consumer Financial Protection Bureau (CFPB), it is now a requirement that all Buyer’s Lender provide Buyers with a Closing Disclosure (CD) 3 days prior to the day of closing. The CD is a five page document that provides all the specific details of your mortgage loan. You’ll want to review the CD to make sure you are in agreement with what is shown according to what you were promised and anticipating. From such items as your purchase price, loan amount, monthly principal & interest rate, any prepayment penalties, estimated monthly payment and it’s calculation, estimated taxes/insurance/assessments, estimates for closing costs and money due at closing, and right down to the correct spelling of your name, you’ll be checking for it’s accuracy as now is the time to make any needed corrections that may appear.
Hopefully, the CD is accurate and you’ll be that much closer to being handed the keys to your new home. The least amount of aggravation at this point is always welcome news. If the CD is not accurate, please discuss with your Loan Officer to correct any errors before you head to closing. I know, the thought of having to correct errors at this point is never music to your ears, but nonetheless, it’s great to know there are some good checkpoints put it place, aren’t there?!
Keep in mind that any major changes to your CD that affect your financing, such as an incorrect loan amount will require that the CD be updated and a new 3 day waiting period would be begin before you’re able to close.
Please no delays, you cry out!
Review Settlement Statement
Just prior to closing which typically can be just a few days before closing or the day before closing, you’ll receive a settlement statement from the Closing Agent, that has been verified by your Lender, that details all the costs of your home purchase that include such items as your loan charges, insurance premiums, taxes, title & settlement charges, government recording & transfer charges, any homeowners association maintenance fees, if applicable, and any others charges that may apply. You will review this, in addition to your Realtor who should have reviewed for accuracy. Your Realtor’s knowledge should extend to examining a settlement statement.
This is the time to catch any errors that could be as simple as a name misspelled.
You want it correct before you get to the next step of knowing how much money you need to have for the day of closing.
Wire your Needed Funds or Cash to Close
Unfortunately, the issuance of fraudulent cashier’s checks from a bank has reached levels that now require that the vast majority of Real Estate closings must be settled with the wiring of funds from your bank to the settlement Closing Agent.
Once you have reviewed your closing disclosure and final settlement statement, as discussed above, you will know the exact dollar amount of what is needed to be wired. This will be the cash that you need after the loan proceeds have been applied to your home purchase and your escrow has been accounted for in the calculation.
You will be provided with the closing Agent’s wire instructions so you know exactly where you will be wiring money from your bank to the closing Agent’s bank. Once you complete this, your bank will provide you with a wire receipt indicating that your funds have been electronically transferred from you bank.
Now, you’re reminded that all of those months and years of saving to buy a home, has suddenly been depleted and your bank account has been drastically reduced – time to start saving all over again!
Walk Through of Home
You’re so close you can almost taste the sweet victory of homeownership!
It’s likely anywhere from twelve hours to an hour before you’ll be owning your new home – it’s really getting exciting now! You’ve come so far to get to this point. But first, hold on, you must take a walk through your, soon to be your home, before it becomes yours. Why, you ask? You need to make sure that the Sellers have kept the home in the same condition from the day you executed a purchase contract with them. Also, if any repairs were agreed upon to be made by Seller, you want to make sure that they were completed properly.
You’ll want to make sure that the backyard doesn’t have a huge sinkhole. You’ll want to make sure that one part of the home hasn’t been struck by lightning or that the home was flooded leaving behind a 3 foot wall of damaged, moldy drywall. Perhaps, that’s a bit extreme, I know, but you get the gist of it.
You’re going to be looking for such things as, is the water heater still functioning, while testing for hot water streaming out of the water faucets. You’ll turn on the air conditioner to make sure it’s cooling, particularly if you’re living here in Southeast Florida where it gets mighty hot! How are all of the kitchen appliances doing? Are they still working? And, you’ll stroll through the entire home to make sure that everything functions as it should and that all of the Seller’s personal property has been removed, nothing has been damaged and that wonderful dining room light fixture that you loved is still hanging overhead!
Well, you wonder, what happens if you find something wrong, as it’s too late now – you’re closing in an hour! What could possibly get addressed in this short amount of time?! Believe it or not, you have time as the home needs to be kept in the same condition as when you went under contract, otherwise repairs will be needed and or compensation offered prior to closing. It would be up to you and what you’d allow to slip through, so to speak. What’s important to some home Buyers may not be worth delaying their closing to others. It’s about what matters to you.
Now, let’s close!
Meet at Closing Settlement Office
The Real Estate home closing has arrived! Cheers!
Here is where all parties to the home sale meet at a previously agreed upon closing time. The Sellers and their Realtor and an Attorney, if using, will likely be there, unless they have already signed their closing documents ahead of time. Sellers signing of documents ahead of time can happen on occasion. The Closing Agent/Escrow Officer/Settlement Agent/Attorney will lead the closing, instructing parties of what needs to be signed and explain each document that needs to be signed. (For purposes of discussion, I’ll use “Closing Agent” for the party directing the home closing.) And of course, you’ll be there with your Realtor and any Attorney you may have hired.
This can often be the first time in which you meet the home Sellers. It can be a pleasant experience when you go back and forth with the home Sellers getting any questions about the home answered. The home Sellers may let you know where the appliance manuals have been placed, how to work the home’s smart home technology gadgets and even letting you know about where the young children in the neighborhood are located for your children to play with them. Most recently, I had a home Seller at a home closing who sung for us all as we waited – she had a beautiful voice!
You just never know what kind of pleasantries will be exchanged at a Real Estate home closing.
Review Settlement Statement, Again
One last time, the Closing Agent will go over the settlement statement that you should have seen prior to closing day as disclosed above. You’ll simply confirm that it remains the same and by all means, if you have any questions be sure to ask. No question is too silly in a home closing.
We won’t go over it again here in detail, as we did above. Please refer to above section in case, you have questions.
Sign All of your Mortgage Loan Documents
This is where your hand gets a workout! Let’s get ready to sign!
The Closing Agent will guide you through all of your loan documents, settlement documents and deed that need signing and/or initialing. You will be directed to where you need to sign and what it is you are signing.
Never hesitate to take a pause and ask the Closing Agent about what you’re signing and by all means, make sure you understand and agree with your Note.
The Promissory Note is your promise to pay, that is secured by the mortgage loan. The Note details the amount of money you borrowed, it’s stated rate of interest and how much time you have to repay the debt. Super important!
Wait for Final Loan Funding
Now that you have signed all of your mortgage documents, the Closing Agent will now email/fax all of the documents you signed and/or initialed, in which your Lender verifies for accuracy prior to issuance of the final loan funding. Once they have confirmed that you have dotted your “i’s”, crossed your “t’s” and signed and initialed on the all required documents, they will release your loan dollar amount to the settlement Agent to finalizing your home closing. No funding, no keys.
Sometimes this can be accomplished quickly say within 30 minutes and other times it can take up to a few hours.
You sit, wait, drink coffee, pop and get to know the other parties to your home sale as described above and if you’re fortunate enough as I was in our recent home closing, your home Seller will have a good singing voice too!
Massage your Hands to Receive the Keys to your New Home
You would think that in this day and age that Lenders would devise a digitally advanced electronic signing system in which to complete a home closing, wouldn’t you?! Not a chance. Perhaps once we reach the age of The Jetsons? You do remember The Jetsons, right?!
You just bought a new home! Woo Hoo! Have you ever been so excited before? Well, maybe you can think of a few other occasions as you recall the birth of your child or that perfect job you landed, yet this will definitely rank right up there with pretty amazing, incredible events!
Congratulations, I’m thrilled for you – here’s the keys to your new home!
Wouldn’t you agree that knowing what to expect is such a relief?! I feel relieved in letting you know! In fact, it’s my job to do so: educating my home Buyers is critical.
We all know how stressful buying a home can be and knowing what happens at a Real Estate home closing is so beneficial to relieve any additional stress.
Understand what was discussed today takes the fear out of a home closing. If you have questions about the home closing process or the home buying process for that matter, be sure to let me know as I’d be happy to go over your concerns with you.
— Lynn Pineda (@LynnPineda) September 9, 2016
More Home Buying Resources included below that you’ll find helpful, I’m sure:
“Smart Questions to Ask Before you Buy a Home” by Business Insider
“Steps to Buying a Home” – by Andrew Fortune
“Avoiding Home Buying Pitfalls” more by Lynn Pineda
“Getting Equity of Your Home” by Bill Gassett
“Biggest Mistakes Made by First Time Home Buyers” by Xavier De Buck
Today’s Real Estate article, “Buying a Home – What Happens at a Real Estate Home Closing?” was written by Lynn Pineda a top Realtor in Southeast Florida. You’ll find Lynn selling homes in Southeast Florida in the cities of Boca Raton, Boynton Beach, Coral Springs, Delray Beach, Coconut Creek, Deerfield Beach, Margate, Parkland, Pompano Beach, Tamarac, Sunrise, Plantation and Ft Lauderdale areas within Broward and Palm Beach counties.
Lynn Pineda, a licensed Southeast Florida Real Estate Agent serving Southeast Florida for over 11 years. Keller Williams Coral Springs Realty. Real Estate Promises Delivered. You can speak with Lynn by calling/texting her at 954-464-1100 or you can email her at: LynnP@ImagineYourHouse.com if you need to buy or sell a Southeast Florida home. Your local, trusted professional when it’s time to buy or sell a home. Real Estate promises delivered. Sept 8, 2016.