The following may be able to provide some basic answers to some frequently asked questions about residential real estate closings. This information is addressed to both the buyer and the seller.
I signed my contract already, what do I do next?
If your contract has already been signed, you are now looking forward to an uneventful closing on the closing date stated in your contract. Sometimes, there are obstacles that you must face which can cause delays and extra time may be required on those issues. If the sale depends on the buyer’s ability to obtain a mortgage or qualify for a mortgage, please remember that the lender is not a party to your contract, although the lender may try to meet the anticipated closing date.
If I am the buyer, how will I know what is required to get my loan approved?
The mortgage broker or the bank officer has the responsibility to tell the borrower exactly what is needed and the buyer/borrower must accomplish these things in advance in order to minimize any delay (i.e., obtaining insurance, financial information, income verification, check copies, etc.). Ask the person who assisted you in obtaining the loan what must be completed and comply with the requests as quickly as possible. You must allow enough time to obtain appropriate insurance. A lender will ordinarily require a survey on the property. If your title company is doing the mortgage title insurance, they will usually arrange for the survey. If you wish to obtain the survey yourself, you must inform the title company assisting you as soon as possible; do not wait until the day before closing is scheduled.
Why is it taking so long to get the closing done?
The closing process can seem quite detail oriented and time consuming, but rest assured that your title company will do everything within their power to complete the closing on time. Unfortunately, the title company has no power over the lender. In any transaction, if there are extrinsic contingencies (things outside the control of the attorney), before following through with the next step, those contingencies must be complied with. If a buyer is purchasing in a condominium or homeowner’s association that requires approval, the buyer should immediately set that appointment and obtain the necessary document of approval from the association. Please remember that your contract is the document which controls everything in this closing and do not make any inconsistent statements or oral promises which differ or could be misunderstood because they may cause problems. Also, please remember that lenders and others want documents faxed to them and sometimes many copies of all documents signed. You may be charged for these costs, plus applicable courier, federal express, long distance calls, etc.
I am worried about repairs to the house that need to be done, but that I may not notice until after the closing?
Most residential real estate contracts include a paragraph about inspections. If this is the case, then an inspection should be done before the sale is complete. Buyers should be extra careful to complete the necessary inspections in a timely manner so as to comply and to meet contract deadlines. If the inspections are not done in accordance with the contract dates, all rights for the buyer may be lost.
Sometimes repair issues can cause problems. If brokers are involved, try to work with the brokers to resolve these issues. If this cannot be done, of course, your attorney should assist you, but that takes additional time for which you may be charged.
As the buyer, how will I know everything about my recent property purchase?
Sellers should let all the representatives know all information about any existing mortgages, maintenance information and addresses and should keep all payments current, so as to avoid any late charges.
Sellers should provide their title company or closing agent with all appliance contracts for any possible pro-ration. Borrowers should also remember that they are not truly approved for a mortgage until a written loan commitment has been received from the lender. That document is vital and lenders do not always give that approval until the very last minute, despite what brokers’ statements may say. If the borrower does not comply promptly with the lender’s requests for information, the loan will be delayed, sometimes the closings are postponed and the parties will lose patience.
When will I know what to bring to the closing?
Buyers will usually need to bring cashier’s checks to the closing, (no money order, no personal checks or credit cards!!), made payable to title company, closing agent nor attorney handling the closing, whichever applies. If a loan is involved, lenders ordinarily do not give the closing agent loan figures until the last minute, sometimes figures are received on the day of closing. Remember, neither the title company, closing agent nor attorney are capable of controlling how the lenders work. Therefore, buyers may find themselves required to obtain a cashier’s check at the last minute. Estimates for the money needed are usually made and then at closing, applicable refunds are made. Estimates are usually more than may be actually needed. Neither Buyer nor Seller should come to a closing until they have been informed when and where the closing will take place. Sometimes lenders do not send the sums needed to close until the day of the closing, so the closing might have to be late in the day. The last business day of the month is usually a hectic closing day.
As the seller, when should I have my belongings out?
Sellers should arrange for the property to be vacant, and all personal property that is not included in the sale, including clothing and household items, medicines, etc., removed before the closing takes place.
Sellers must have all the keys to the property, including any mailbox or recreational keys or pass cards, available to the buyer at the closing.
What if I don’t find the answer here?
If you are not able to find the answer in this discussion, you may want to seek the advice of an attorney.