Closing on a home is perhaps the most exciting part of the real estate journey. After all the house hunting, mortgage approvals, and negotiations, the finish line is now in sight. However, even at this stage, key steps must be taken to ensure a smooth closing process. 

Careful preparation can prevent unnecessary delays and avoid potential stress. Read for tips on how to best prepare for closing day.

1. Understand the Closing Timeline

Being aware of the closing process and timeline is crucial. Typically, the closing date is set within 30 to 60 days after the purchase agreement is signed, but it can vary based on the buyer’s financing, the seller’s readiness, or other factors. 

Ensuring all parties are clear on the expected closing date helps everyone plan accordingly. A well-coordinated timeline helps prevent last-minute rushes and reduces stress for all parties.

2. Review the Closing Disclosure Form

The Closing Disclosure (CD) form is one of the most important documents in the home buying process. It outlines all of the final terms of the mortgage, including the loan amount, interest rate, monthly payments, and total cost of the loan. By law, the lender must deliver the CD form to the home buyer at least three business days before closing. 

The home buyer should review the CD form thoroughly to ensure there are no surprises. It should be compared to the initial loan estimate provided during the mortgage application process, and any discrepancies should be addressed promptly with the lender.

3. Prepare for Title Insurance

Title insurance protects both the buyer and the lender from potential legal disputes over the property’s ownership. As part of the closing process, the title company will order a title search to ensure the property is free from liens, judgments, or other issues that could affect ownership. 

Most lenders require buyers to purchase lender’s title insurance, which protects the lender’s financial interests should the home loan become unenforceable. Purchasing owner’s title insurance is also highly recommended, as it protects the homeowner against future claims to their property. It’s important to review the title insurance policy and understand what it covers.

Owner’s title insurance involves a one-time premium paid at the time of closing.

4. Verify Closing Costs

Along with the Closing Disclosure form, it’s essential to pay close attention to the closing costs. These fees typically range from 2% to 5% of the purchase price and include items like loan origination fees, appraisal fees, and title insurance, among others. 

Knowing exactly how much to bring to the closing table is crucial, whether it’s provided in the form of a cashier’s check or a wire transfer. Confirming the total amount with the title company conducting the closing is a critical step. Extra caution should be taken to verify wire instructions to avoid potential fraud.

5. Complete the Final Walkthrough

Before closing, there is usually an opportunity to do a final walkthrough of the property. This step ensures the home is in the condition agreed upon in the purchase contract. During the walkthrough, it’s important to check that any agreed-upon repairs have been completed and that nothing has changed since the last visit. Any issues should be addressed with the real estate agent immediately to avoid delays in the closing timeframe.

6. Gather the Necessary Documents

To help ensure a smooth closing process, it’s also essential to have all necessary documents prepared and ready to bring to the closing. These may include:

• A government-issued photo ID

• Proof of homeowner’s insurance

• A cashier’s check or proof of wire transfer for closing costs and down payment

• Any additional documents requested by the lender or title company

7. Maintain Communication with the Title Agent

The title company and its representatives play a critical role in coordinating the closing process. They handle the transfer of funds, prepare the closing documents, and ensure the transaction is legally sound. Staying in close communication with the title company leading up to closing day is key. If any issues arise, such as missing paperwork or unclear instructions, they can help resolve them quickly.

8. Be Ready for Closing Day

On closing day, all parties will sign the necessary documents. This includes the deed of trust, promissory note, and final closing documents. Home buyers should review each document carefully and ask questions if anything is unclear. Once everything is signed, the funds will be transferred and ownership of the property will officially change hands.

Following these steps and staying organized can minimize stress and help ensure a smooth closing process. Preparation is key to a successful closing, so taking the time to review documents, maintaining communication with the title agent, and finalizing any outstanding details is essential. 

To learn more about the closing process, contact Linear Title & Escrow today.