Sometimes closure is the start of something extraordinary, especially in the case of a home. If you’ve recently found the home of your dreams, submitted an offer that got accepted, and are in the final stages before move-in, the closing stage may be the only thing between you and your new set of sparkly keys. Whether you’re a first-time buyer or a veteran when it comes to home purchasing, knowing exactly what to expect in the closing process not only sets you up for success but allows you to align all that you need for a smooth transition of ownership.
These nine steps detail the precise way to officially own the home you’ve set after. Let’s dive into the closing process a bit further.
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Decide on an attorney for your final transaction.
The attorney in charge of escrow will be your primary point of contact when it comes to closing on your new home. Their main job is to verify the accuracy and completion of all documents and ensure all terms are met successfully. The attorney works closely with your realtor throughout the entirety of the process. The attorney acts as a neutral third party in the transaction to allow for a smooth ownership transition from start to finish. It is important to mention that the choice is up to both you and the seller when picking an attorney. Most often, realtors will provide suggestions to choose from.
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Select + purchase homeowners insurance
Homeowner’s insurance is required to purchase your home and must be active prior to the final closing. Proof of coverage must be presented during the closing stage. Homeowners’ insurance, similar to other insurances such as car and health, varies greatly. The cost is based on location, property size, your insurance history, and other personalized factors.
The average cost in the US is around $1,200 a year.
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Consider Title Insurance
Title insurance is a one-time expense that you pay before closing. Title insurance is not required in every state but is highly recommended as it is added protection for you and your home. If you purchase a home in Massachusetts, title insurance is not required by law.
Title insurance protects you and your lender in the event that someone stakes a claim on your property. This can happen at any point in the ownership process, causing more headaches and anxiety than needed. The scariest part? If you opt out of title insurance, you could potentially lose your home to a random claim on it in the future. In addition to the security of having title insurance, it also provides for the cost of legal fees to defend you in the case of a title claim and for payment of losses that could result from a title claim.
The average cost for title insurance is around $1,000.
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Meet all conditions of your loan
Before you can close on a home, all conditions of your loan must be met. All requirements are clearly stated in your loan document, but typically they include things like:
- Income verification
- Proof of obtained homeowner’s insurance
- Down payment information
- Final home appraisal
- Specific terms agreed upon by buyer and seller
If you have any questions or concerns about meeting all of your loan condition requirements, talk to your lender as soon as possible to avoid any delay or issue closing on your property.
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Prepare for your move
Now is the time to prepare your current space for the upcoming move. Some of the best ways to prepare include:
- Scheduling movers
- Organizing rooms and storage spaces
- Packing up your belongings
- Purging old items that you no longer need
- Scheduling time off work
- Purchasing and scheduling the delivery of new furniture and appliances
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Don’t miss the closing disclosure
This nationally-recognized form is vital in your closing process. It provides detailed loan requirements, including an itemized list of closing costs. It should be delivered to you at least three business days before the closing date. If you notice any discrepancies from the original loan agreement, talk to your lender as soon as possible to reconcile quickly to not delay the closing process.
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Complete your final walkthrough
The final walkthrough is a critical final step in the closing process. It is scheduled about 12-24 hours before your definitive closing timeline and before all final closing document signatures.
This in-person event gives you one last opportunity to walk through the property and ensure that the seller left the home in the same condition you saw it during the initial offer stage.
The walkthrough also acts as a time to review any repairs that were requested of the seller. If things don’t look as they should, your realtor will work with the seller’s realtor to ensure things are ready to go promptly.
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Finalize your closing documents
At closing, the escrow agent will request a list of documents. We encourage you to organize your documents ahead of time to fully prepare for this step.
The most common documents requested during this time include:
- Photo identification
- Income verification
- A list of home addresses over the last 5-10 years
- Money order or bank certified check to cover applicable closing costs
You must verify the list of required documents with your realtor and lender before your closing meeting to ensure you do not miss any crucial information. Remember that these documents are required for all loan borrowers on your home loan application.
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Legally transfer home ownership
The last step in the closing process is to legally transfer the property from the sellers to the buyers. During this step, signatures are obtained, and any necessary cash is transferred to the seller. Once this step is completed, the home of your dreams is officially yours.
We encourage you to change out all locks, take a big sigh of relief and do a little happy dance as you enter your new home for the first time.
Getting an accepted offer on a home you dream of is wonderful, but it is only the first step in the home purchasing process. Once all terms and conditions of the offer are agreed upon, the closing stage can officially begin.
It is essential to understand the ins and outs of the closing process so that your path to homeownership is clear and easy to navigate. So, if you’re hoping to buy a home or have questions on the closing process, contact me today. I would love to help you close on the home of your dreams in 2022 or beyond!
