What Happens Prior to the Closing of a Home?

There are several steps that need to take place in any real estate transaction prior to a closing appointment. Only after the following steps are completed will the closing take place:

• A purchase agreement needs to be finalized.

• A home inspection needs to be approved.

• An appraisal of your home needs to be completed.

• The mortgage application is completed and approved.

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What is closing?

 Closing (also called settlement) is the legal transfer of property ownership. Usually, but not always, possession is transferred at closing. Sometimes the seller may ask to close the sale but retain possession, and pay rent to the buyer until vacating the property at a later date.

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Who attends closing?

 Face-to-face closing are common in most states, although a few states do not require them. Your buyer’s representative can provide details for your situation. The participants usually include:

- You, the buyer
- The seller
- The real estate agents representing the buyer(s) and seller(s)
- Attorneys for the buyer(s) and seller(s)
- The closing agent, the title insurance representative, and the escrow agent. Often one person fulfills all three roles, coordinating and recording the exchange of the documents and money, disbursing funds, and handling various closing details.

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Which Party handles Title and Closing Costs?

The responsibility for title and closing costs is negotiated as part of the real estate transaction. The responsibility will vary based on the individual sale. In most cases, the buyers and sellers will split the costs associated with the title and closing costs.

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What Do I Need to Bring to the Closing?

• Identification will be needed at the closing: A government-issued identification card such as a driver’s license or a passport. In some cases, two different forms of identification are required.

• Additional paperwork may be required at the closing, such as proof of homeowners insurance, the results of a home inspection and other legal documents needed for the transaction.

• Your spouse should accompany you if you are married. A form of identification from your spouse will be needed.

• A cashier’s check should be brought to the closing in the total amount of the down payment and closing costs. Your mortgage lender will provide you the final amount prior to the closing, allowing you to prepare the check from the bank.

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Where is closing held? 

Closings are usually held at a title company’s office. Their job is to confirm the current legal owner of the property, reveal any mortgages, liens, judgments or unpaid taxes on the property, and identify any restrictions that may affect the sale of the property. Any problems need to be corrected before a buyer can receive "good title."

What do I need to bring? Your buyer’s rep can advise you on what you’ll need to bring to closing, but typically buyers must provide:

- Payment of closing costs
- Proof of insurance
- Approval of inspections of the property

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What Can I Expect at the Closing?

Expect the closing to last for about an hour. The length of time the appointment will take may vary based on the complexity of the transaction and the availability of funds. Both parties will be required to sign off on several different documents during the appointment.

The closing agent will be available to explain the details of all the documents you are signing and answer any questions.

What Documents Are Signed at the Closing?

You will be signing many different documents on the day of your closing, including:

• Title Transfer: This document transfers the ownership of the home from the previous owners to you.

• Truth-in-Lending Statement: This document details the fine print of your mortgage loan, and your mortgage company by law is required to provide you with it at the closing.

• Title Insurance: Title insurance protects you as well as your lender from any issues regarding the title of your home.

• Mortgage Loan Documents: These documents will finalize the approval of your loan and will give you the necessary financing to purchase it.