When buying or selling a home, closing day is the light at the end of the tunnel, the final hurdle to clear before it’s all over. A successful closing day is a cause for celebration. The day can either be a breeze or an anxiety filled headache. But if you follow these 3 simple steps, we ensure that your closing day will be as smooth as possible.
Step 1: Get Your Paperwork in Order
Before you even think to walk into your closing, all of your paperwork should be settled, organized, and in order. This shouldn’t be finished the day before, or even a few days before. Ideally, your paperwork should be finalized at least a week before your closing date.
If you are a home buyer, you should have the completed the following items:
- Finalize your loan. Arrange to meet with your lender before the closing date to ensure that all necessary paperwork is complete and your loan is finalized.
- Obtain homeowners insurance. Your homeowners insurance policy should list the buyers as insured, as well as the lender. Once you purchase the policy, you should make sure to have the insurance company send you a proof of insurance document.
- Obtain Title Insurance. A title officer will perform a title search to make sure there are no clouds on the title (third-party claims to a property). If there are, these problems will need to be resolved before the property becomes yours.
- Complete the Home Inspection. A home inspection is not required, but you’d be stupid not to have one performed. If you find a serious problem with the home during the inspection, you’ll have an opportunity to back out of the deal or ask the seller to fix it or pay for you to have it fixed.
Step 2: Review, Question, and Review Again
Mistakes are not unheard of at closing. There are hundreds of pages of documents that all need to be 100% accurate. In addition to reviewing your own documentation, make sure to look over the review the Settlement Statement, which is typically used for residential real estate closings, and contains an itemized list of all of the closing costs associated with the mortgage loan. Make sure you have relevant documentation of your homeowner’s insurance, a paid receipt of your first year homeowners insurance premium, and a certified check for the closing amount.
While you are reviewing everything, be sure to ask questions. Your loan officer, real estate agent, inspector, and other professionals are there to help. Don’t be afraid to bother them. If anything is unclear or not as previously discussed, be sure to make a note and contact the relevant party. There is no problem in asking questions, but problems do happen if you are too afraid to speak up.
Step 3: Clear Your Calendar and Have Patience
While closings can sometimes take as little as 30 minutes, they have a tendency to drag on for hours or more. It is important that you are not in a rush to complete everything and have the time to make sure everything is done right. After all, one mistake at closing (or a failed closing) will end up costing you months or years worth of work; so taking off one day is more than worth it. Especially don’t try to close during your lunch break. Not only will you be late for work, but you’ll also be hungry and frustrated.
Most important of all is to go into the closing with a Zen like mindset. Even if you have checked and doubled checked all of your paperwork, you still have to rely on the other party. Just have patience if something does go wrong and remind yourself that they want to complete this transaction just as much as you do.
Step 4: Celebrate!