So you’re under contract? Congratulations! This is a huge step for the both the home seller and buyer, but it’s not the end. There are still quite a few things to cover before closing day. Make sure you know what happens during the closing on a home so that you are prepared. Once the offer has been negotiated and signed, the real work begins! Always rely on your realtor because they have numerous vendors that they use on a daily basis to help you at every turn during the closing process.
In our previous post, we covered what home buyers need to know. You can read this post here so you’re up to speed on the process before you go under contract. This post will cover the closing process for both the buyers and sellers. A lot of buyers may not understand or even know what steps the closing process consists of, so this post will give you the information you need for a better understanding. Remember that every house, every realtor, and every contract is different. So your realtor will be able to help you will everything that your closing process involves.
The closing process, or in escrow (which is the name used by all agents except us here in the South), is one of the most important times that you will rely on your real estate agent. They’ve already found you the perfect home, made the offer happen, and even negotiated to help you buy the home! The work isn’t done just yet, the closing process has a lot of steps to go through until the day you get the keys to your new home. A good real estate agent keeps everyone updated on the process and makes it go as smoothly as possible.
Once the offer has been signed by all parties it becomes an executed contract. The contract will state your closing date (the day the house officially becomes yours!) so you know how much time you have to get everything done. Every contract is different, so this post is outlining the basic steps to help you understand the process and what goes on during the closing process time period. Your realtor will help you take care of everything that needs to be done for your big day, your closing day!
When the offer has been accepted, the executed contract will be forwarded to all parties involved in the transaction: the buyer, seller, listing agent, selling agent, lender, title company, and closing attorney. The closing attorney chosen is agreed upon between the buyer and seller. Your real estate agent knows who to send these documents to, they have all the contacts already to make the process go smoothly.
The buyer will then send any supporting documents requested from their lender to the company for their loan. These documents should be submitted promptly to ensure that the loan gets approved. Every lender will request different documents, but some common ones are taxes, payroll stubs, outstanding credit reports, and any other conditions to the buyers’ loan.
Next, the buyer will start conducting their inspections on the home. The first inspection is the home inspection. The title company also needs to order the title for the home. After the home inspection is complete, other inspections can be done. Learn more about what to look for in a home inspection before buying in this post.
Other inspections will depend on the home and can include a HVAC inspection, roof inspection, septic inspection, and any other inspections stated in the contract. Any repairs negotiated from inspections will also need to be done prior to closing.
Once any repairs negotiated with the seller are completed, then the lender will order the appraisal. A termite inspections and or wood infestation report will also be done. The buyer will need to reinspect any negotiated repairs to ensure that they are done. Once all inspections are completed, then the attorney will gather all the information. The lender will send out the closing disclosure to the buyer prior to closing.
Utility transfers also need to be handled on both the buyer and seller ends. The buyer needs to have utilities transferred to their name on day of closing and seller needs to cancel all utilities on the day of closing. Be sure to also go to the post office and do a change of address, or even easier, go online with the U.S. post office and submit it there!
If you want internet or cable, contacts providers to setup an installation date. Same with any alarm systems that you want installed. Another item that buyers need to take care of is to get their home insurance in place for their new house!
Lastly, the buyer will have a final walk through as close to closing as possible to make sure the house is in acceptable condition. This will make sure that anything in the contract was done acceptably. Any funds that the buyer needs to send should be wired the day before closing. Then, the next day is the big closing day!
Buyers and sellers should always take their checkbooks in case of any additional funds needed. Both parties should also take their drivers license and another form of ID just in case as some lenders need two forms of ID. And then everyone will go to closing, the day that everyone is looking forward to!
What to Expect on Closing Day
The closing day for both buyers and sellers can be both an exciting but anxious day! But no need to worry, your closing day is actually very easy. It consists of signing paperwork and the buyer receiving the deed and keys to their new home!
On closing day the buyers and sellers meet at the closing attorney’s office where the attorney will have both parties sign the necessary documents. The seller will sign their closing papers and transfer the deed and any title work over to the buyer. On the buyers side, if there is a loan, then the buyer will sign their loan paperwork and the deed to the property.
Remember, any funds that need to be transferred should be wired the day before closing, so this should be done already. As a backup, bring your checkbook like we mentioned before, just in case any other costs come up.
There shouldn’t be any drama on closing day, everything should be done prior to this day. All paperwork should have been completed and handed in to the lender, title company, and closing attorney. Your realtor handles this (paper work can include all expenses incurred, receipts for any repair work, termite and or wood infestation completed, etc.).
Once attorney processes the paperwork, they will come back and deliver any proceeds owed to the seller or buyer after closing. After everyone has signed their paperwork then the exciting part comes, the part they buyer has been waiting for: the buyer will receive the keys to their new home! All of the hassle will have been worth it for this moment!
After closing, be sure to take a copy of the deed to your local courthouse to file your homestead. Here are a list of some other things to do as a new homeowner. Click here to learn what happens after a house closing. This will ensure that there will not be any surprises for the next property tax year! This post will help give you moving tips to make your moving process easier.
You can finally celebrate officially owning your new home! And don’t forget to take a picture with your beloved realtor. Congratulations, happy day! Enjoy your new home!
If you have any questions, please don’t hesitate to reach out! I would be more than happy to help you. You can call me at: 205-568-5435 or email me at: dianna.howell@kw.com
