Preparing for the Closing

During the course of the average purchase, it stands to reason that some small, easily forgotten items may not come to light for negotiation until just before or right at the closing table. Unfortunately, this is the normal course for most transactions. And, considering the dozens of items involved in selling or buying a new home, it’s not surprising that one or two items remain unresolved until day of (and sometimes at) the closing. The following suggestions will prepare you for the basics, so that the issues that may pop up at the last minute can receive your full attention:
Title Commitment - Whether a buyer or seller, you should be able to review your title commitment prior to closing. This commitment, while not the final policy, specifies what the title insurance covers, the recorded outstanding liens against the property, how it is titled and exceptions to coverage in the event of fraudulent documentation. If selling your home, you should ask your agent to order a preliminary title search at the time of listing. This should bring to light any unreleased mortgages, judgments, or other unanticipated clouds on your title, giving you ample time to resolve such issues well in advance of receipt of an offer or at your closing.
Surveyor Location Report - As with the title commitment, a seller should ask their agent to order a preliminary surveyor location report. Such a report reveals how the improvements are situated upon the land, informs them whether the property is located in a flood hazard area, and outlines possible encroachments. This would give a seller an opportunity to correct or address problems before the closing takes place. If a buyer, always ask for a surveyor location report (unless your intended purchase is a condominium). A surveyor location report usually costs around $150-$175 and is a small investment for peace of mind.
Mortgage documents – If you thrive on the nitty-gritty details, we suggest you request your lender send you a sample loan package so you can review and read every document in detail prior to closing. This will give you time to review the fine print and get your questions answered in advance rather than trying to contact your mortgage company during the closing for an immediate response. Your lender can explain in full detail (ahead of time) each document’s purpose and ramification. Then, while at closing, you will sign actual documents that reflect the particulars of your specific loan; namely the principal, interest rate and APR. If selling, review your mortgage documents for prepayment penalties, and contact your mortgage company to get a final payoff. Ask about their policy on whether they will exhaust any funds in escrow toward your balance, or if they will refund the outstanding escrow to you after closing. Inquire as to how long it may take to receive the check from your escrow account.

If you are not offered the opportunity to view these documents prior to closing, ask for them. We recommend allowing two (2) weeks to review them so all your answers can be addressed and any problems resolved well in advance. Other items that you will need for closing include:

Homeowner’s Insurance – Not only will you need to pay a full year’s premium in advance, but several months may be charged at your closing to fund your escrow account. Bring a copy of your binder and paid receipt for 12 months of coverage to the closing.
Picture ID – it necessary for the closing agent to verify your identity, so bring picture ID.
Certified Funds – any money to be brought to closing should be in the form of cashier’s check, certified check, or postal money order. Make the checks out to yourself, and then endorse them at closing. This includes any negotiation for lease backs, repairs, pro-rations for unused fuel, or personal items purchased from the seller.

If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.

When you are serious about moving… put our TEAM to work for you!