What to Expect in a Real Estate Closing
The closing can feel like an almost mythical moment in the home buying process. It's that moment where, after all the searching, negotiating and number crunching, you finally sit down, sign paperwork and are handed the keys. It is also the easiest part of the home buying process, unless something goes wrong, in which case it can become the hardest part.
No need to panic. It probably will be a piece of cake. Real estate agents, assuming you have one, will be holding your hand throughout the process (metaphorically, of course; if a real estate agent really held your hand, that would just be weird). Still, things can go wrong. If you really want to be prepared, it can't hurt to know what's in store.
Setting the scene. You'll likely be in some cushy meeting room in a building or office park, and you'll be surrounded by a lot of professionals, who are all making money, thanks to this sizable contribution of yours to the current economy.
Some of those professionals will likely include your real estate agent, the title closer and maybe the lender. Also, expect there to be a lot of paperwork being passed around the table for multiple people to sign.
Keep TRID in mind. TRID stands for TILA-RESPA Integrated Disclosure Rule, which became the law the land on October 3. It ensures you'll be given forms designed to make it clear to you, the homeowner, exactly what you're spending to buy your house, and you'll have three days to look everything over
Before the new rules, buyers often wouldn't see their closing statement until closing and if there are any significant changes to the loan terms, as described by the TRID rules, that will trigger another new three-business-day waiting period. Arguably, this is a good thing. Nobody wants to feel pressured into buying a house with terms they feel they never would have signed off on, had they realized exactly what the terms were. But an unexpected three-day business waiting period can have an unintended side effect.
It can be tricky when you have movers lined up based on a closing date, and even more so if there are multiple transactions that are all contingent upon one another.
Home buyers need to get all the required documents and information to their lenders as soon as possible. Lenders will not be able to make things happen on time if they haven't received everything they need.
Don't buy anything expensive before closing. You have just managed to get a lender to agree to loan you the money to buy a house. In this day and age of relatively tight credit, that's no small feat. Don't go and blow it now by suggesting that the lender made a mistake.
You may want to buy furniture, a new car, a lawn mower, a snow blower, a rake, and along with many other things at the home improvement store. But you don't need it yet.
Even if you know you can afford it, and you have stellar credit is stellar – don't risk it. Sign the papers at the closing, get the keys and then if you want, whip out your credit card.
Bring proper identification. You don't have to worry about bringing along a bunch of forms. Most of that paperwork you'll go over with your agent or lender before the closing and now is the time to ask a lot of questions, if there is anything you don't understand. There’s no such thing as a stupid question.
But there is one very important piece of documentation that only you can bring, that is your driver's license, or some other form of government-issued photo I.D.