For a first-time buyer the closing is fraught with anxiety. This is the moment when you’ll finally own your property, the point of no return. While this sentiment is accurate, keep in mind that the closing is usually a formality – a necessary formality, but a formality nonetheless.
In other words, by the time you sit down to sign all the necessary documents, record the deed transfer, and get the keys, everything’s been agreed to, all the details have been taken care of, and all that’s left is making the agreement real.
If this weren’t the case, the closing agent wouldn’t proceed, your lawyer wouldn’t proceed and the other party wouldn’t proceed. To reiterate: by the time you get to the closing, everyone wants to be there, wants to get the deal done and wants to do it error-free.
That’s not to say that you won’t feel some nerves. So here’s what to expect and how to prepare:
Make sure you have everything ready before you arrive. You’ll get a list of what you need from one of the following, depending on your state: your lawyer, the closing agent or your lender. The list of necessary documents will always include proof of insurance and your photo ID. And, obviously, bring anything else you’re told to bring. Also, regardless of whether it’s on the list, bring the Purchase and Sales contract, so that you can double-check the numbers in the final document you sign.
Transferring your money takes some planning. You’ll be told the amount of money you need to bring to the closing, with instructions on what forms of payment are acceptable. Often, certified and cashier’s checks are accepted, or you’ll have the option to wire the money to the appropriate party. If wiring money, you’ll need to wire it at least 24 hours prior to closing, if not sooner. Even if you’re doing a cashier’s check, remember that all the money should be in the same bank account and that you can only get a certified check during banking hours. So, plan for how you’ll get the money together several days before the closing, so that the closing isn’t delayed or rescheduled because of slow bank transactions.
When you arrive, there will be many people, some of whom you don’t know. While closing procedures vary by state, expect several (or all) of these people to be present: the seller’s attorney, your attorney, an agent for the title company, the bank’s attorney, the closing agent for the lender, the sellers, the listing agent and your realtor. Sitting in the midst of so many people can be intimidating. But don’t let it worry you – sit next to your realtor and lawyer and ask questions if you have them. Often, everyone else in the room, except you and the seller, have gone through the process hundreds of times, so they should be happy to help you understand the process.
Prepare to sign lots and lots (and lots) of documents. Plan on being there two hours or so, with the majority of the time spent reviewing and signing documents. Your lawyer or real estate agent will be able to tell you what each and every document means – if you don’t understand, ask. You’ll note that many of the documents will look familiar – they’ll literally be documents you went over a few days earlier. None of the documents should be new ground – they’re all things that you’ve agreed to previously – or, at the very least, they’re perfunctory documents that your lawyer has reviewed and approved. So, if something seems unusual or you don’t understand a document, make sure you have it explained.
Once you’re done, you own it! Yes, that’s right, it’s yours. Get a bottle of champagne, go to your new place and have a toast. That’s the customary celebration – and exactly what we recommend.