Preparing for Closing

So, you're excited about buying a new home and eager to get on with packing and moving?! BUT be careful not to neglect the final stage in the process. The last thing to do before you take possession of your new home is to close on it. The closing can either be a simple procedure or a nightmare - much depends on your readiness for the day.

Closings are typically held at title companies that are able to research the chain of title to your home. A title company or an escrow company, generally determined by the seller, executes the closing itself.

The next item you will want to arrange is the closing date. This date is important because many things are contingent upon it: your move-in date, closing costs, down payment, tax deductions for annual income tax purposes to mention a few. Approximately two weeks before your closing date, call all pertinent utility companies. This two-week notice is important to ensure that your service is not interrupted due to last-minute difficulties. Ask that the utilities at your old residence are turned off the day after closing and the utilities for your new residence turned on the day before closing - this overlap will minimize the change for confusion.

After the closing date is set, you should take a pre-closing walk-through. Plan it with enough lead-time to allow the seller to fix anything that you feel is unsatisfactory. The house must be in the condition that you agreed to buy it in. If you requested that some minor repair be made before you take possession of the house, make sure those repairs have been made.

Allow time to gather the documents that you will need to take to the closing. Approximately two days before closing, your lender will give you an exact figure, down to the penny, of the funds you will need to bring to closing. This money must be brought in the form of a cashier's check or certified check made out to you. In addition to this check, you will need to bring your previously obtained homeowner's hazard insurance policy. This policy will serve as your proof of insurance. The first year must be paid in advance of closing; subsequent years will be paid through an escrow account.

The actual closing consists of three parts; reviewing and signing of your loan documents, exchanging of documents, and disbursement of funds.

• In the first phase when you are signing the documents, be prepared to do a lot of reading and a lot of signing. There may be over 20 documents that require your signature, some of these include the actual mortgage, affidavits, truth-in-lending statements, etc.
• The next phase involves the signing/exchanging of documents by both you and the seller. After both parties have inspected the documents for errors and have signed them, the title company provides the final signature. Some of these documents are the deed, the bill of sale, property survey, insurance certificates, etc.
• Finally, the last (and often the most emotional) step-you hand over your check. This transfer of funds goes from you, the buyer, to the seller, attorneys, brokers and title company. You have now completed the business of closing.

Congratulations on your new home!