In the last post we performed the final walk through of our property being purchased. If any issue arose during the walk through it should be resolved by now and we should be all set to sit down at the closing table.

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If you missed any of the previous posts and the possible scenarios you may need to sort out – you can find them here:

The Final Walk Through The Estoppel Letter The Title Search The Appraisal The Inspection

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What To Expect At Closing

We are about to close on our first property, yikes!
What do we need to know? What do we need to bring? Who should be there?

Let’s create a scaredycatguide check list to answer some of those questions before discussing key items to particularly pay mind too.

Items to Know for Closing

• Closing date and location
• Settlement Agent (either a title company or lawyer depending on your state. Some states require legal representation while others do not)
• Escrow Agent

Items to Bring to Closing

The best thing to do is contact the settlement agent a few days beforehand and ask them exactly what you need to bring to closing.

However, these are the items we generally should and/or need to bring

• Closing Disclosure (we want to compare this to the final closing statement)
• Proof of Wire Transfer or Cashier’s check
• Your ID (driver’s license is standard)

Who Should Be There

This depends on your state laws and if you are buying the property with someone else or not.

If your state requires legal representation then your lawyer should be present.

If you are buying the property with a partner, spouse, family member, etc. who’s name will also be on the title and/or loan then they will need to be present to sign documents as well.

However, if you are buying in a state where a lawyer is not required and it’s just you buying, you very well can show up at the title company yourself. Though, your real estate agent should come with you on your first deal to make sure nothing slides by, atleast if they want to be a good agent that you look to for future deals.

Key Items To Review

We need to remember we are the ones purchasing a property and have every right to take our time and comb through each document if we please.

Many times the settlement agent will want to expedite quickly being they know what all the documents are and since there are so many pages on deal that using financing.

However, on a first purchase we aren’t familiar with these docs and you will be signing what seems like a hundred of pages, thus you have every right to take the time for detailed explanations.

Remember, they are being paid for a service so don’t feel bad making them earn their fee!

Reviewing the Closing Disclosure

You should receive a copy of the closing disclosure three days prior to the actual closing date. Any last minute adjustments occurring after that you will see in your final closing document.

There are two things we should really do with the closing disclosure:

• Review it against our Loan Estimate (provided three days after you applied for a mortgage)
• Review it against our final closing document (even though you get a closing disclosure three day before closing, there can be last minute changes)

The first review - is to see how the loan estimate we were given measures up to the closing disclosure. Mainly comparing the interest rate and closing costs.

We want to verify:

• Interest Rate
• Total Closing Cost

Both these should be the same or close to the estimate. If you see any drastic changes, contact the loan officer or the settlement agent for an explanation. Do not sign the closing documents until you are satisfied with the answers or have had adjustments made to anything that may have been an error.

Next, we want to review the Closing Disclosure received three days prior to the copy being provided at closing.

Ideally, these will be identical and no last minute changes were needed. However, be sure to compare them for consistency or to confirm any change is shown as agreed upon.

Conclusion of Closing

Verify you have the following items at the end:

• Property Deed (this is the recording that you now own the property)
• Closing Disclosure
• Promissory Note (documentation that you agree to pay loan)
• Mortgage or Deed of Trust (document that designates the property as security for the loan)

State law dictates whether it’s a mortgage or deed of trust document.

Finally - Don’t Forget To Check The Obvious

When reviewing all these documents we tend to focus on the numbers and financials to ensure we are not paying for something we shouldn’t.

However – also verify things like your name and the address being spelled properly. Little typos like that can cause a nightmare when trying to sell or payoff your mortgage.

Last Note - your part of the closing can also been done offsite using a notary. If all the document are in order a notary can meet you to sign all documents. However, on your first deal I suggest being on site with the settlement agent and/or lawyer so you can ask questions or address any last minute items.

Congratulations – you just bought your first property!

Next post we will to a quick review of a closing when buying with cash!

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Regards,
Mitchell J
Download the property calculator for free at ScaredyCatGuide

Thanks pixabay for the images