Buying a Home – What Happens at a Real Estate Home Closing?

Review your Closing Disclosure

With the advent of the Consumer Financial Protection Bureau (CFPB), it is now a requirement that all Buyer’s Lender provide Buyers with a Closing Disclosure (CD) 3 days prior to the day of closing. The CD is a five page document that provides all the specific details of your mortgage loan. You’ll want to review the CD to make sure you are in agreement with what is shown according to what you were promised and anticipating. From such items as your purchase price, loan amount, monthly principal & interest rate, any prepayment penalties, estimated monthly payment and it’s calculation, estimated taxes/insurance/assessments, estimates for closing costs and money due at closing, and right down to the correct spelling of your name, you’ll be checking for it’s accuracy as now is the time to make any needed corrections that may appear.

Hopefully, the CD is accurate and you’ll be that much closer to being handed the keys to your new home. The least amount of aggravation at this point is always welcome news. If the CD is not accurate, please discuss with your Loan Officer to correct any errors before you head to closing. I know, the thought of having to correct errors at this point is never music to your ears, but nonetheless, it’s great to know there are some good checkpoints put it place, aren’t there?!

Keep in mind that any major changes to your CD that affect your financing, such as an incorrect loan amount will require that the CD be updated and a new 3 day waiting period would be begin before you’re able to close.

Review Settlement Statement

Just prior to closing which typically can be just a few days before closing or the day before closing, you’ll receive a settlement statement from the Closing Agent, that has been verified by your Lender, that details all the costs of your home purchase that include such items as your loan charges, insurance premiums, taxes, title & settlement charges, government recording & transfer charges, any homeowners association maintenance fees, if applicable, and any others charges that may apply. You will review this, in addition to your Realtor who should have reviewed for accuracy. Your Realtor’s knowledge should extend to examining a settlement statement.

This is the time to catch any errors that could be as simple as a name misspelled.

You want it correct before you get to the next step of knowing how much money you need to have for the day of closing.

Wire your Needed Funds or Cash to Close

Unfortunately, the issuance of fraudulent cashier’s checks from a bank has reached levels that now require that the vast majority of Real Estate closings must be settled with the wiring of funds from your bank to the settlement Closing Agent.

Once you have reviewed your closing disclosure and final settlement statement, as discussed above, you will know the exact dollar amount of what is needed to be wired. This will be the cash that you need after the loan proceeds have been applied to your home purchase and your escrow has been accounted for in the calculation.

You will be provided with the closing Agent’s wire instructions so you know exactly where you will be wiring money from your bank to the closing Agent’s bank. Once you complete this, your bank will provide you with a wire receipt indicating that your funds have been electronically transferred from you bank.

Now, you’re reminded that all of those months and years of saving to buy a home, has suddenly been depleted and your bank account has been drastically reduced – time to start saving all over again!

Ensures Buyers Financing Commitment is met

You recall where I discussed a Buyer’s ability to finance a home earlier in the article, right? Here is about where the Buyer’s Lender’s diligence and underwriting come together to provide the required “ written loan commitment”. According to the Real Estate contract, there is a date in which the Buyer’s Lender must provide a written loan commitment to the Seller and they must keep the Seller advised of the loan progress prior to commitment issuance. Failing to meet the date and advise of the progress can result in the Buyer’s default, should their loan be denied, ultimately risking their escrow deposit. The commitment date typically averages from 15-30 days from the day the Real Estate contract was executed by both parties.

Your Realtor will have your back here in knowing that magical date; a critical contract date. Your Realtor will be aware of the calendar and won’t be begging for constant updates, as it’s the Buyer’s responsibility to advise of progress and of any changes; for example, if the Buyer should change Lenders mid stream they had better let your Realtor know or if there are any delays for whatever reason.

This can be an area where it’s importance is overlooked by the Buyer side, which can result in you as a Seller being compensated for default. You want your Realtor to be watching this behind your back. The stories I could tell about this exact scenario playing out.

Establishes Assurance of Getting to Closing

Getting to the closing table is the goal of all parties. There are a lot of parts that need to be put together to have a successful closing. So many of which have already been mentioned above. Know that your Realtor will be diligently working behind your back to make sure all the pieces to the puzzle are falling nicely into place and all parties to the transaction are doing what is required of them.

I’ve spoken a lot about the Buyer, their Realtor and what is needed from them, but what about the Title/Settlement Agent? Have they done their part in securing a Title Commitment, which evidences a clear title to the property that has been provided to the Buyer’s Lender? Have they ordered municipal and lien searches? This reflects if there are any outstanding bills/liens/open permits, etc. If there is a homeowner’s association have they ordered and received the Estoppel letter? An estoppel letter details whether your account with the association is current or if any payments/assessments are due.

When you get all these pieces lined up properly and your Realtor has assured their alignment, you’re on your way to closing.

Your Realtor knows that keeping stress away from you is ideal. A Realtor who does all this behind your back, while saving you from a few more gray hairs, is likely a Realtor you’ll tout as one of the best, top Realtors around. Experience it like a day relaxing at the beach.

Sell your house in Cincinnati

Coral Springs Realtor keeps stress away

Wrap Up

Half the battle of a successful home sale is having a Realtor who has got your back. You want a Realtor who knows how to take charge. You need to have the confidence that they’re highly capable, knowing you don’t have to watch over every detail. They just gotta get it done!

Your Real Estate experience should be with limited issues, easily processed. Sure problems may occur, yet as it has been said before and as your Realtor should embrace, “Problems are just opportunities in work clothes” – Henry J. Kaiser.