If you’ve been paying your home mortgage, you’ve likely paid for it for years on end. Some even have paid off decades worth of money to secure that nice house they always wanted. Some people buy homes straight up.
56% of all American homeowners own their home properties in full. This makes Americans more and more tenacious with their payments. They want to make sure that closing is within reach.
What happens on the day of closing? What closing documents do you need to prepare to make the entire process legit?
In this guide, we’ll give you everything you need to know about home closing. Here’s what you need to do:
1. The Home Closing Process Timeline
Closing is the last step before that house that you worked your ass for is yours. At last! You’re about to reap all the benefits of owning your home.
Looking far back at the home closing process timeline, remember that you and the seller set the date. During the contract negotiation, your seller will consider a date for the closing.
At this time, you would pay earnest money – which is a security deposit. Once the seller agrees to your offer and accepts the earnest money, you will set a day of closing on a later date.
Even if there is a handshake agreement between you and the seller, your agents need to work out a better timeline with your lender and title agency. This home closing process timeline will give them enough time to work out everything from their side.
2. What Happens At Closing Day Itself?
What happens at closing itself? Sure, the seller will transfer the title to the buyer, but there are specifics. You want to make sure you know the details and what you should expect.
First, a buyer would bring the payment to cover any costs and fees remaining for the home. Next, the original homeowner or seller will start an ownership transfer. They will sign over closing documents, including the title, to the buyer.
Agents will be around to witness and handle the closing transaction itself. Sometimes, a lawyer or a notary public will handle the case instead of an agent. They will register the deed with government agencies, which will then ratify that the buyer is the new owner.
The real estate agent will then receive their commission. The seller will get their final fee after balancing the books and all fees closed.
3. What To Do On Closing Day?
You may think that now you’re on the home stretch, you can relax. Far from it, the steps of the closing process are among the busiest you’ll be. There are a few areas that you would want to cover first.
After all the effort that you did for your home, the last thing you want is for something to go wrong. Human error is a typical problem area when closing. To make sure everything happens without a hitch, you want to have the right people with you.
You would want to make sure you can work with a veteran agent that can help your network. You want local market experts that know how to help reduce your risks. You would want to connect with a number of people in the real estate industry.
Home inspectors to check the home
Attorneys to handle legal details
Title insurance agents
Escrow officer and handler
You want to make sure that you cover as many bases as you can. Review all documents. Make sure to complete closing contingencies.
Closing contingencies are things that need to happen before you can close homes. These may include:
Homeowners and title insurance
Full, verified appraisals
Loan details and full documentation
Home inspection details
Final ocular inspection for detail match
All of these are crucial in your home closing process timeline.
4. Which Documents Should You Have?
At closing, there are some closing documents that you would need to handle yourself. The entire real estate transaction is a complicated process that needs an expert to handle it. It’s a good thing that escrow officers and handlers will take care of a big bulk of this.
When it comes to mortgage-related documents, you will notice that you would need to sign many docs. If you’re the buyer, the steps of the closing pattern include:
Full bill of sale
Tax declaration transfer
Mortgage details and more
Closing disclosure and more
Once all payments come through, all documents finish and all commissions paid for, you’ll get the home.
5. Delays You Might Experience
Like any transaction, there will be different levels of delay.
For example, appraisal of the property’s value may come lower than you expect. Your loan might have issues and the lender is seeing problems in your finances. There’s a possibility that home inspection finds different issues in the home that lowers its values.
Make sure you have enough money too. Apart from the cost of the home, you would want to have between 3 to 5% property value in closing fees. Know that you would need to pay many of these fees early in the home closing process timeline.
You need to remember that you need to stay methodical throughout the entire process. If you have to move through 100 pages worth of closing documents one by one, do so.
Preparing For The Day of Closing
When it’s the day of closing when buying your dream home, you want to make sure you are ready.
Prepare for the day weeks beforehand by finding the right people and furnishing all the documents you need. Handle the closing contingencies and reduce delays and risks as much as possible.
If you’re looking for more homeownership tips, check out our other guides. We have tons of great information that can help make the entire process much easier. Whether you’re looking for overviews or easy tips, give it a look now.