You’ve gone under contract on a home, completed the home inspection, negotiated the Inspection Objection and the property has passed your lender’s appraisal. Now what?
Waiting to close can be an anxious time for some buyers. Depending on the status of your financing, you may still be jumping through hoops to provide the documentation the lender requires to move forward with the loan. If you currently have a house on the market, you may be waiting for your own offer to come through before you can close on your future home. Setting aside any unusual contingencies you may have in place for the transaction, there are several commonalities most buyers will experience as they approach the scheduled closing date.
Welcome to the wonderful world of title insurance! The title company will research the current property deed and all attachments thereto in regard to the property you are purchasing to ensure the title is “clean” (or "clear") and to appropriately set you up for taking title of the property. The work of the title company is vital to ensuring you are moving forward soundly with the purchase and no one will come out of the woodwork later with a prior claim to the property you thought you owned. The title company will assist you on closing day and communicate with you in advance to ensure they are setting up your legal documentation appropriately.
Your lender will require you to secure home owner’s insurance as part of the transaction, and depending on where you are buying a home, you may be required to pay for additional provisions such as flood insurance or additional hail coverage. Talk to several carriers - including your current auto or renter’s insurance provider - about coverage, rates discounts available for using the same provider for home and auto.
Read the documentation you receive about your proposed coverage carefully, and ask questions. If your basement floods due to a burst pipe, who is liable for the repairs and water remediation? Will your possessions be covered, or just the property, and what is the value of this coverage? If your dog bites a neighbor and you are sued, will your homeowner’s insurance back you up? How much will you have to pay out of pocket if a significant section of shingles blows off your roof in a storm? Don’t wait until you have a claim – take time now to learn how your home owner’s insurance policy will protect you – and where there are gaps. Knowledge is power and lack of it, in this case, can lead to pitfalls.
Some title companies will take care of transferring the majority of the utilities for you, but in some locations this is not the case, and you will need to arrange for the transfer of utilities into your name. Even if the title company is making these updates on your behalf, you’ll want to change your address of record with your mobile carrier, the phone company and cable or satellite provider. Find out in advance how soon you need to schedule these changes – if you rely on internet service at home for work purposes, for instance, you’ll want to make sure you don’t have a gap. If you have additional services to consider, such as private trash collection services, you’ll want to make arrangements a week or two before closing.
Notify Postal Service
Contact the post office to arrange for a change of address as of your closing date and to have all mail forwarded here. If you are renting, make sure your landlord has your new contact information in case any mail falls through the cracks and needs to be forwarded. If you are selling your current home, you may want to share your forwarding address with the buyer, if you are comfortable doing so. That way you won’t miss important correspondence from the IRS or your good friend Publisher’s Clearing House.
If you are paying closing costs, the remaining balance on your down payment, a buydown of your interest rate, or have purchased personal property from the seller outside of the contract (an item of furniture or an appliance not included in the contract, for example), you’ll need to obtain a cashier’s check for the appropriate amount(s) to bring to closing; personal checks are rarely accepted. The earnest money you included with your offer will be attributed to this amount, and the accounting for this will show up on your Good Faith Estimate.
Complete Your Final Walk Through
The day before or day of closing, you’ll want to walk through the property to ensure all agreed-upon repairs have been complete and that all inclusions (appliances, window treatments, light fixtures, furniture, etc.) are in place. If repairs have not been completed to your satisfaction or items are missing, your team can arrange to have these item(s) handled financially by the seller via a price reduction or credit at closing, or the closing can be postponed until the repairs are complete or the items in question are restored to the property.
You’ll meet with the closer for the title company, a member of your TRELORA Team and your lender at the closing appointment. You will receive the final copy of your Good Faith Estimate (sometimes called the Loan Estimate) as well as the HUD. Closing can be as quick as 20 minutes or as long as a couple of hours if the title company is waiting for the funding for your loan to come through, and you are welcome and encouraged to ask questions as you sign the various documents that are part of your closing. Congratulations – you’re a homeowner!