Preparing for the Closing

What are the key preparations and considerations I should make for a real estate closing?

What to Expect at the Closing

When the contract is signed you will then concentrate on getting your financing in order. Your loan officer will contact you in regards to what items they will need from you to process your loan application. Typically at a minimum they will need your recent tax returns, W-2, recent paystubs, and recent bank statements. It will be important to act quickly on any request for documents as the lender needs to review every document in order to issue a loan commitment. Remember it is your loan commitment date in the purchase and sale agreement which is important for you to protect your deposit. If you do not have a commitment by that date you will need to either terminate the contract and get your deposit or request an extension in order to get the commitment. 

Securing homeowner's insurance 

During this time you will also want to shop for your homeowner’s insurance. The lender will require you to have the insurance in place in order to do the closing, usually you have to pay the full year premium upfront or have it paid at closing, check with your lender for their requirements. The lender will require your insurance agent to issue what is called an insurance binder.

When the lender is all set with what they need from you after the commitment is issued they will then have what is called a “clear to close”. That is when the attorney for the lender will contact all the parties to the closing and schedule a time and place for the closing. The location of the closing will depend on many factors, sometimes it is the Registry of Deeds, the real estate agent’s office or the attorney’s office. The lender will prepare the documents for the actual closing and email them to the closing attorney’s office, when that happens depends on how busy the lender is, sometimes it is a week before the closing and sometimes unfortunately it is an hour before the closing.

Understanding the settlement statement

The closing attorney will prepare the settlement statement, also called the HUD-1, which breaks down all the closing costs, adjustments and credits between the parties. This statement will tell you how much of a check you will need to bring to the closing, it must be a certified check not a personal check. The attorney will let you know who to make it payable to. Please refer to the section on how to review a settlement statement for more information.

You will schedule a final walk through of the property with your agent. This is usually a day before or just prior the closing. This is to make sure the property is cleaned out and vacant and to make sure there has been no damage done between your home inspection and the closing.

For the actual closing you will need to bring your check, a photo id and any other conditions that the lender may require (for example, a lender may need a copy of your most recent paystub). The closing will have the attorney for the lender, the sellers or their attorney, and sometimes the real estate agents. The closing attorney will explain all the documents to you and will have a copy set for you. When everything is signed the attorney will then record the necessary documents at the Registry of Deeds, when the deed is recorded you are the official owner of the property. The keys and any other alarm codes will then be given to you by the seller. Congratulations on being a new homeowner!


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