Frequently Asked Questions About Home Closing

   By Ashley Melton, Realtor® 

Buying a house is a big deal. There are tons of things to consider and to keep track of, and If you’re new to the real estate market, you may not know where to start.

This post will help you understand the basics of the home closing process so that you don’t miss anything important.

What is a home closing?

A home closing is truly the final step in a home transaction. It's a legal transaction that transfers ownership of real property from seller to buyer. In most states, this occurs when all parties sign a contract for sale and purchase, and the deed is delivered to the buyer.

Is a home closing necessary?

There's no getting around it, a home closing is essential for any real estate transaction to be legally binding. That being said, it's important to understand what happens when you close on a property so there are no surprises. Let's start with some basic terminology.

What do I need to have with me on closing day?

A photo ID, any outstanding documents needed by the title company and mortgage lender. Cashier's check or wire transfer to cover closing costs.

Where does the closing happen?

You'll typically meet at the attorney's office and sign all your documents in a conference room.

Who will be at the closing?

Typically, the buyer, attorney, and mortgage lender will be present. In some locations, the seller and their representatives may also attend but usually, this is done separately, or the seller pre-signs all the required documents to complete the transaction.

How long does it take to complete the closing process?

Depending on if any issues arise during the walk-through that need to be addressed, closings will take some time because of all the paperwork and signatures required. And as I mentioned before, it's important that you understand what each document says and that you're comfortable with the contents before you provide your signature. Don't feel pressured to sign everything quickly - this is a big financial commitment so you don't want to be caught off guard by something at a later date.

From walk-through to being handed the keys, I would set aside several hours to complete the process.

Is there anything that can cause delays in a closing?

While it's always the hope that everything goes smoothly on closing day, delays can happen. There are several things that can come up to delay the process you should be aware of:

Appraisal discrepancies

Comparable home sales are used to estimate the home's value. Because home prices have increased at such a rapid pace, appraisals can sometimes not reflect the market and come in lower than the offer price. 

If this occurs, there are a few options you can consider. The first is to try and renegotiate with the seller and ask them to lower their purchase price to match the appraisal. You can pay the difference to make sure the deal goes through or you can walk away from the sale completely.

Large purchases before closing

Even if you came into the home buying process with a pre-approval letter in hand, the entire deal could fall through if you lose the financing to your mortgage loan. Making large purchases, opening credit cards, or anything that changes your financial health could jeopardize your loan application.

RELATED: Top 10 First-Time Homebuyer Mistakes to Avoid

Inspections and repairs

Home inspections and the repairs that result are other potential hold-ups. Minor repairs are typically negotiated easily in the purchase contract with either closing credits to the buyer or the seller taking care of them as a stipulation of the purchase. However, large issues that arise such as foundational defects or insect infestations are costly and can cause tension in the negotiations over whether the seller will address them or not.

Walk-through concerns

While doing the final walk-through of the home, you may notice an agreed-upon repair wasn't completed or damage to the home occurred while the seller was moving out. In addition, you may find an item that was supposed to convey is missing. These situations will require time to resolve before your closing can occur.

Final Thoughts

While there are a lot of moving parts to contend with to finalize the closing on a home, I hope this outline has helped to clear up some of the mystery and relieve some of the stress you may be feeling. The most helpful thing you can do is to find experienced real estate professionals to work with on this process. Getting referrals from friends and family to help you choose the best real estate agent is a great first step as they'll have a fantastic network of attorneys, lenders, inspectors, and more to help you through the entire process.

Are you ready to take the next step in your home journey? Contact me today and ask any questions you have about your home needs - I'd love to help.

   By Ashley Melton, Realtor®