Closing
On the date specified in your contract, you will go through the necessary procedures for the transfer of ownership to take place. The time of closing will be set in advance as a time that is mutually agreeable by you, the seller, the title company, and both real estate agents, if applicable.
The HUD-1
Prior to the closing date you should receive a form from your lender called a HUD-1. This is the standard form issued by the Department of Housing and Urban Development for closings. It itemizes each charge and credit for both buyer and seller, so you can see a complete listing of your total cost at closing. The amount of your down payment, plus fees and closing costs, less any credits or items paid outside of closing (POC), will total the amount you need to bring to the closing table.
The total amount must be provided in certified funds, meaning that the check you bring must be guaranteed by your bank to clear. Your bank can provide you with a certified check for this purpose; simply tell them that you are closing on a home and they will make one up for you, usually as long as you have the ability to withdraw sufficient funds from an account you have with them.
I recommend taking along a zippered bag or other sealable case in which to put the certified check. You’ll essentially be carrying around a slip of paper that is worth large sum of money, so it would be less than wise to simply shove it into your pocket or hold it in hand.
The Home Warranty
It’s always a good idea to have a home warranty. This can either be purchased by you, or you may have to ask the seller to do so if they do not offer. There are a number of companies that provide home warranty plans, so it’s a good idea to do your research and choose the one you think will keep you most heavily covered. Generally, a homeowners warranty keeps you from having to worry about mechanical failures of certain appliances and fixtures within the household for the first year after you purchase the residence. Certain warranty plans may have a deductible amount that you’ll need to pay on each claim, but this is always much better than taking the brunt of any costly repair bills that may come up. Check out different home warranty companies and see what each one offers before you make a decision.
The Walk-Through
Schedule a time in advance of the closing, either on the day-of or in the days preceeding, to visit the property with your real estate agent and do a final check to make sure that everything is as it should be. The closer you do this to the actual title transfer the better, and in fact it is often done immediately before going to the closing table.
You should do your own thorough inspection to make sure that no unexpected changes have been made since the last time you were at the property, that all appliances and fixtures expected to be in working order are indeed functional, and that any repairs or work done on the property that was specified as part of the sales contract have been made. This is meant as a more surface re-checking of many of the things the home inspector looked at earlier, simply to make sure that everything is in proper condition.
If the utilities were not all active during the home inspection, talk to your real estate agent about having them turned on for the walk-through. This will be important for making sure that you have proper running water and water pressure, proper electrical power to fixtures like lights and ceiling fans, and the correct condition for appliances fueled by natural gas such as flame cooktops.
The information below does not constitute an all-encompassing checklist, but you should use it in consideration of the kinds of things to think about as you do your walk-through.
Walk-Through Checklist
Appliances
- Dishwasher
- Washer / Dryer
- Refrigerator / Freezer
- Stove / Cooktop
- Disposal
- Trash Compactor
- Window A/C Unit
- Humidifier / Dehumidifier
- Heating & Cooling System
- Water Softener
- Air Cleaner
- Sump Pump
- Well Pump
- Septic System
- Hot Water Heater
Water
- Sinks / Faucets (Kitchen and Bathrooms)
- Toilets
Structure
- Floors
- Walls
- Windows
- Ceilings
- Closets
- Roof
- Gutters
- Attic
- Foundation
- Deck / Patio / Porch
- Garage
- Basement / Crawl Space
- Shed
- Fireplace
Electrical
- Lights
- Ceiling Fans
- Smoke Detector(s)
- Carbon Monoxide Detector(s)
- Outlets / Jacks
The Closing Table
As long as you are satisfied with the condition of the property, you are ready to go to closing. You’ll meet at the title company’s office and be presented with the HUD-1 and a pile of forms to sign and/or initial. It should be a similar experience to when you made up your sales contract with the realtor, except that it will be the closing agent who explains each page to you before you sign it.
There are a variety of different forms used depending on your state, loan type, and many other factors, so no comprehensive list exists to cover every possible case. Just pay close attention to what the closing agent tells you, try not to be so excited about your new home that you fail to understand each document, and relax so that you can take time to enjoy the experience and absorb what is going on around you. After all, this may not be the only home you ever buy!
After Closing
Make sure to get door keys and any other items necessary for the physical transfer to take place, and thank the seller, your real estate agent, and the closing agent for their time. In certain instances the seller may not be present at closing as they may have chosen to close at the office of a personal attorney, but regardless of the circumstances it is important to let all parties present know that you appreciate it if they’ve been helpful and behaved professionally, and most importantly, thank them for taking your money. Only kidding. Just wanted to see if you were paying attention. Now go enjoy your new home!