Verify All Conditions Have Been Met
Review the list of contingencies with your client before heading to the closing table. Typical contingencies include a home inspection, appraisal, and approval for a mortgage loan. Only set a closing date if the house passes inspection, appraises at fair market value, and the buyers’ mortgage is approved.
Verify the title search is clear, and title insurance is purchased to protect the new buyers from any legal claims to the property. And review the Closing Disclosure and Loan Estimate statements (formerly known as the HUD-1 Settlement Agreement) before closing. These documents outline the mortgage payments, terms of the loan, additional fees, and closing costs that must be paid at the table.
Schedule the Final Walk-Through
From final loan approvals to title reports, most of this information comes in just days before closing on a home. Within 24 hours before closing, the buyers are permitted to do a final walk-through of the house. Buyers need to carefully inspect the property to ensure it is still in the condition specified in the contract.
If the sellers agreed to make repairs, they should all be completed before the final walk-through. And buyers should also be sure the previous owner has vacated, or has plans to move, within the time allotted in the contract. If the repairs are not completed or something is not per the contract of sale, it is crucial to reach out immediately to resolve the issues before closing.
Gather the Required Documents
Closings are usually held at the title company, attorney’s office or real estate agent’s office. Some closing documents might be signed digitally. Buyers should know the necessary documents to provide at closing, such as:
- proof of homeowners insurance per the mortgage lender’s terms
- the contract of sale between the buyers and sellers
- all home inspection reports, such as a termite inspection from a licensed pest control professional
- government-issued photo ID, such as a drivers license, with names that match the ones that will be used on the property’s mortgage and title
- a certified or cashier’s check to pay the closing costs, which are revealed to the buyers at least one day before closing per federal law
Be Ready to Sign Documents
Even if some of the documents are signed digitally, there is always plenty of paperwork to sign at closing. The buyers should be ready to spend about two hours processing documentation and hashing out the final details. Bring water and a snack to keep clients going through this arduous process. The closing may include the buyers, sellers, closing agent, and attorneys.
Encourage the buyers to take a deep breath and review what they sign. Mortgage documents to sign may include the promissory note, truth in lending statement, mortgage or deed of trust, and the monthly mortgage payment letter. And closing documents could consist of the closing disclosure, warranty deed or title, proration papers, abstract of title, statement of information, and declaration of reports.
Know the Move-In Date
Once the papers are signed, the buyers become homeowners. Remind them of the date the sellers are moving out and when they can move in. If the sellers no longer reside at the property, the buyers might be able to move in immediately. Some buyers and sellers might prefer a couple of weeks to tie up loose ends, such as ending a rental lease and making sure nothing is left behind at the house. The terms are usually outlined in the contract of sale.
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