A residential real estate closing is quite often a time of great expectation and also a time of great anxiety. You have found a house you want to buy, you’ve negotiated over repairs, and you’ve given your lender piles of papers so they could approve you for a loan. The big day, which you’ve been waiting for weeks to happen, has finally arrived. What should you expect at the closing?
The seller typically signs all of the documents before the closing and is not present at the closing. So, it is usually you, your real estate agent, and your lawyer who start the closing. Your lawyer will be acting as the representative of the lender. Occasionally, your mortgage broker may attend the closing to ensure that the mortgage part of the closing goes smoothly. Your lawyer should be explaining what each mortgage document means. The terms in the promissory note and mortgage must be the same as the terms in your commitment letter. If there are any differences, your lawyer must stop the closing and contact the lender to resolve these differences. Assuming there are no problems with the mortgage documents, you will sign each document exactly as your name appears on the documents. This means that you must use a middle initial if it appears on the documents or not use a middle initial if it does not appear on the documents, regardless of how you usually sign paperwork. Depending on which lender you use, there may be 10 documents to sign or more than 20 documents. If you have a co-borrower, most documents will need to be signed by both of you, but there will be documents that only require one signature.
Your lawyer will have prepared the HUD-1 settlement statement which itemizes the closing costs, the expenses of the seller and buyer, and the adjustments between them. She will have told you how much money to bring to the closing in the form of a bank check. Now, she will explain to you how she arrived at that amount by going over each line of the HUD-1 settlement statement. You will be paying for all of the costs of the mortgage loan (although most lenders deduct your closing costs from the loan amount), escrows so your lender can pay the real estate taxes and homeowners’ insurance premiums for you, the title insurance premium, the surveyor’s fee, your lawyer’s fee, real estate taxes for the next quarter, and recording charges for the deed and mortgage. You may also be reimbursing the seller for the real estate taxes he paid for the current quarter.
At some point during the closing, the seller’s attorney will come to the closing to deliver a Deed and Affidavit of Title to the buyer’s attorney. The listing agent may also come with the keys to the house, otherwise the seller’s lawyer will have the keys. When the seller’s and buyer’s attorneys agree that all of the terms of the Contract of Sale have been met and when all of the documents have been signed, the realtor delivers the keys to the property to the you and the buyer’s attorney distributes the checks to the seller’s lawyer and the realtors, the closing has been completed. You’ve now become a home owner. Congratulations.