How to prepare for closing on a house
Closing signals the end of what can be a long and tiring process – you are finally going to be a homeowner! Whether you’re a first-time buyer or it has been several years since you closed on a house, knowing what to expect at closing can help the day go quickly, smoothly, without complications, and get you into your new home faster! The following guide can help ensure you’re ready and prepared when closing day arrives.
1. Do a final walkthrough
Most contracts allow buyers to do a final walkthrough of the home around 24 hours before closing. In addition to guaranteeing the previous owners have vacated the property, this allows buyers to check that any issues the sellers agreed to fix have been repaired; likewise, it ensures that the property is in the condition agreed upon in the contract.
2. Make sure the contingencies are taken care of
Contingencies are a common part of most real estate contracts. Before closing, make sure conditions of the contingencies have been met. Common contingencies include:
⦁ Home inspection: Home inspection contingencies allow buyers to have the home professionally inspected prior to the sale. This can help uncover any hidden damage to the house, as well as ensure buyers are informed of the condition of the property.
⦁ Appraisal: Appraisal contingencies are often required by mortgage lenders; this guarantees that the amount of the loan is equivalent to the amount the property is worth.
⦁ Financing: Financing contingencies allow buyers to back out of the contract in the event their mortgage falls through.
3. Clear the title
At closing, buyers “take title” of a home and establish themselves as the legal owners. Mortgage lenders require a title search as a part of the closing process; title insurance is also required as it protects buyers from any legal claims against the house. Clearing the title also ensures that no one else, such as a distant relative or ex-spouse, can claim that they own the home. As the buyers, you have the right to choose the title company; your real estate agent can make recommendations to help you choose a title company.
4. Bring the right documents
Forgetting a crucial document is where many homebuyers make a mistake during closing. In addition to the check or cash to cover final closing costs, buyers will need to bring:
⦁ Proof of homeowners insurance
⦁ A copy of the contract with the seller (often provided by the agent, but double-check who is bringing it!)
⦁ Home inspection reports
⦁ Government-issued photo ID
⦁ Any paperwork required by the bank to approve the loan
Prepare to sign so much paperwork your hand hurts, but remember that at the end of closing you will get the keys and officially become homeowners. Congratulations!