The settlement (or closing) process is the final step in a real estate transaction. With proper preparation, buyers and sellers can move through this stage with confidence. Understanding key documents, timelines, and responsibilities in advance helps ensure the closing proceeds as expected.

The following tips can help promote a smooth closing experience.

Review the Closing Disclosure (CD) Form in Advance

The CD form is a document detailing the final loan terms and closing costs. Lenders are required to deliver this document to the borrower (homebuyer) at least three business days before the closing date. It’s important to review this document thoroughly to ensure the accuracy of the:

• Loan amount
• Interest rate
• Projected monthly payments
• Itemized closing costs
• Prepaid expenses
• Total funds due at closing

If there are any discrepancies in the financial terms, you have questions, or you need further clarification, contact your lender right away.

Understand Closing Costs

Closing costs are fees paid at settlement, consisting of costs related to loan processing, recording, and title services, among others. These may include:

• Lender-related fees
• Title insurance and settlement services
• Recording fees and transfer taxes
• Prepaid items (such as property taxes and homeowners insurance)

Address Repairs and Closing Credits Ahead of Time

Following a home inspection, the buyer and seller may agree to either completed repairs or a monetary credit in lieu of repairs. These agreements should be clearly documented prior to closing to ensure they are recorded properly in the final paperwork.

This may include:

• Written confirmation that agreed-upon repairs have been completed in accordance with the contract (when applicable)
• Receipt or invoice documentation to support contractual obligations (if required)
• Verification that any negotiated credits are accurately reflected on the final settlement statement

Confirm Responsibility for Transaction Costs

Real estate contracts typically specify how certain expenses are divided between buyers and sellers. These terms may also include seller concessions or credits toward closing costs. 

To confirm accuracy:

• Ensure that all negotiated terms are included in the written contract
• Verify that all agreed-upon credits appear correctly on the CD form

Confirm Accepted Forms of Payment

Title companies have specific requirements for delivering funds at closing, which are usually wire transfers or certified funds.

Before closing day, it’s essential to:

• Verify the exact amount required
• Note acceptable payment methods and processes
• Follow the instructions provided by the closing agent

Utilize Available Resources

Questions may arise during the closing process, and qualified professionals are available to provide clarification. Your real estate agent, lender, and the title agents conducting the closing each play a role in facilitating the transaction. 

Educational resources from the Consumer Financial Protection Bureau (CFPB) also offer guidance on closing documents and borrower protections. 

Being well-prepared at closing is the result of early review, clear documentation, and open communication with all necessary parties. By understanding the process and confirming details in advance, buyers and sellers can approach the closing table with clarity and confidence. To learn more about the closing process, contact Linear Title & Escrow in Virginia Beach, VA.