What to Expect at Closing When Buying a Home

Closing day is the final step in the home buying process, and it’s an exciting milestone. However, it can also be stressful if you’re not sure what to expect. In this article, we’ll go over everything you need to know about the closing process, so you can feel confident and prepared when the big day arrives.

What is Closing?

Closing, also known as settlement or escrow, is the final step in the home buying process. It’s the day when you officially take ownership of the property, and the seller receives payment for their home.

Who Will Be at Closing?

The people present at the closing will depend on your state and the type of transaction you’re doing. Generally, you can expect to see the following individuals:

  • You (the buyer)
  • The seller
  • Real estate agents for both the buyer and seller
  • The closing agent (usually an attorney or title company representative)
  • Lender representative (if applicable)

What Happens at Closing?

At closing, you will sign a lot of documents. The closing agent will explain each document and answer any questions you have before you sign.

The following are the key things that will happen during the closing process:

  1. Reviewing Documents

The closing agent will provide a set of documents that require your signature. These documents will include the following:

  • Closing Disclosure
  • Deed of Trust or Mortgage
  • Promissory Note
  • Homeowner's insurance policy
  • Title insurance policy
  • Bill of Sale (if purchasing personal property)
  • Affidavit of title
  1. Paying Closing Costs

You will be responsible for paying closing costs at the time of closing. These costs include fees for services like the appraisal, credit report, and title search. You will also need to pay for things like property taxes, homeowner’s insurance, and prepaid interest.

  1. Down Payment

You will need to bring your down payment to closing in the form of a cashier’s check or wire transfer. This is typically the largest check you will ever write, so make sure you have enough funds available in your account.

  1. Title Transfer

The closing agent will transfer the title of the property from the seller to you. You will receive a copy of the deed, which proves you are the legal owner of the property.

  1. Mortgage Disbursement

If you’re using a mortgage to finance the purchase, the lender will send the funds to the closing agent, who will then distribute the funds to the seller and pay any outstanding debts or fees associated with the purchase.

  1. Closing Costs Breakdown

Before you sign the final documents, the closing agent will provide a breakdown of all the costs associated with the sale. This will include the purchase price, closing costs, and any other fees.

  1. Document Signing

You will be asked to sign several documents, including the deed, mortgage, and promissory note. Make sure you understand everything you’re signing before you do so.

  1. Homeowner's Insurance

You’ll need to have homeowner’s insurance in place at the time of closing. The lender will require you to have a policy that covers the full value of the home.

  1. Walk-Through

Before closing, you’ll have a chance to walk through the home and make sure everything is in the condition you agreed upon. This is your last opportunity to verify that all repairs and agreed-upon terms have been met.

  1. Handing Over the Keys

Once all the documents are signed and the funds have been distributed, the seller will hand over the keys to your new home. Congratulations, you’re officially a homeowner!

Closing can take several hours, so make sure you set aside enough time in your schedule.

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