There is no way to guarantee a smooth path from an approved contract to the
settlement table, but doing your part is at least half the job. Expect minor
problems and delays along the way. On the seller's side, title problems are a
common cause of postponed settlements. On your side, bureaucratic snags such as
extensive credit checks and slow appraisals can bog things down. In many cases,
there isn't much you or the seller can do but wait.
While you're waiting for completion of all the processes now in motion, you
Apply for homeowners insurance on your new home.
Get an exact accounting settlement cost, and make sure the money and
necessary documents will be there at closing.
Select a date for the final walk-through of the house.
Contact utility companies about starting service in your name.
Insurance on your new home
Your lender will require you to take out a homeowners insurance policy,
something you would want to do anyway. The lender wants to cover the amount of
its mortgage loan so it can recover the money in the event of a loss. However,
it's up to you to see that your insurance coverage remains adequate by getting
property protection, liability insurance and/or any additional coverage you
think is necessary.
The final inspection
The house you're buying must be handed over to you in the condition specified in
the contract. To verify this, schedule a walk-through of the house shortly
before settlement, several days in advance is best, to allow time for the seller
to correct any last-minute problems.
Take along a simple device, such as a plug-in nightlight, to test all
electrical outlets. Turn on the furnace and air conditioning, flush toilets and
turn on faucets, put the washing machine and dryer through a cycle. In short,
put the house through its paces.
If anything needs fixing or further cleaning, tell the seller immediately.
Neither you nor the seller wants to postpone the settlement, but make it clear
you won't go to closing until a second walk-through is satisfactory.
What happens at closing
The closing is where ownership of the home is officially transferred from the
seller to you. Your closing officer works for the title company and coordinates
the document signing and the collection and disbursement of funds. Your main
role at the closing is to review and sign the documents related to the mortgage
loan and to pay the closing costs.
Most parties involved with the purchase of your new home will attend your
closing. The closing is a formal meeting typically attended by the buyer(s) and
the seller(s) (and their attorneys if they have one), both real estate sales
professionals, and, of course, the closing officer. The meeting is typically
held at the title company's office.
What to bring to closing
For things to go smoothly, each party should bring certain documents and be
prepared to pay the necessary fees. Many closing costs can be paid by personal
check, but ask the closing attorney or closing officer. A certified or cashier's
check may be required. Find out to whom checks should be made payable.
The seller and his attorney are responsible for preparing and bringing the
deed and the most recent property-tax bill. They also will bring other documents
required by the contract. This can include the property insurance policy,
termite inspection, documents showing the removal of liens and a bill of sale
for personal property.
Make sure you have adequate funds for the down payment and other settlement
costs, arrange for your attorney to represent your interests at the meeting,
bring the loan commitment, inform the lender of the meeting time and place and
have your driver's license ready as proof of identity. Finally, it's a good idea
to bring a copy of the purchase contract to refresh your memory.