The processes to get to a home closing can seem like a lifetime when you are purchasing your first home. From the time you decided you wanted to start shopping for a home and found the right mortgage broker in Chicago to making an offer and negotiating on the home you want to buy, all of your efforts start to become a reality once your broker says the lender cleared you to close.
Yet, before you take ownership, there is still one major aspect to buying the home you will need to complete: the closing day. There are several processes specific to closing on a home. You need to be aware of these, ahead of time, so you will be prepared and help avoid the closing falling through at the last minute.
Closing on a House Process
The first thing you will want to do is schedule the closing with help from your broker. When deciding on a date, it is highly recommended to avoid the last day of the month. If there should be an unexpected delay that pushes the closing out into the next month, it often increases closing costs for both the buyer and the seller—like prepaid interest and prepaid property taxes.
It is better to schedule the closing in the middle of the month. This way, if the unexpected does occur, you have or the seller has time to resolve any outstanding issues and reschedule the closing prior to the end of the month.
There will be many forms and documents for you to review and confirm they match original agreements before they are signed. Ideally, you should plan on taking the day off of work or, at least, half a day to complete your closing.
Once you have a confirmed the closing date and time, your next step is to arrange the final walk-through of the home at least one day prior to the closing. A final walk-through is needed to be performed to verify there are no alterations, changes, or damage to the property that have occurred since the seller accepted the sales offer and the purchase agreement was signed.
Sometimes there could be discrepancies, and you will want to make sure these are resolved before sitting down at closing or by requesting an addendum be added to the sales contract that outlines the seller’s responsibilities for ensuring the discrepancies are resolved to your satisfaction. The addendum should also contain details about what recourse you have should the seller fail to live up to their end of the agreement.
Closing Day Checklist
When you arrive on the closing day, you will want to make sure you bring various documents and cash. It is beneficial to make a checklist of items and ensure all of these are completed three to seven days in advance of the closing:
- Down Payment
- Escrow Account Balances
- Cash for Closing
- Proof of Insurance/Insurance Binder
- Good Faith Estimate Document
- Copy of Sales Agreement Contract
- Inspection Reports
- Any Documents You Supplied Your Broker
Keep in mind, the actual cash and documentation you need to bring along can vary. For instance, your down payment may already be held in an escrow account, so you would just need to sign that over to the seller during the closing. Your mortgage broker will inform you what you need to bring and what they will bring with them to the closing.
Who Is Present at the Closing?
There will be several important people at the closing. These can vary, based on state and location, but should include:
- Seller’s Agent
- Title Company Agent
- Closing Agent
You and the seller may also elect to have your own real estate lawyers present for the closing. The buyer’s real estate agent might be present at the closing, too.
Why Could a Closing Fall Through?
There are a few different reasons why your closing could fall through and not be completed:
- Seller failed to make required repairs.
- The buyer’s financial situation has changed.
- The buyer failed to conduct the final walkthrough.
- The seller changes their mind and decides they want to keep the property.
- The seller or buyer does not have the cash required to close.
Granted, these types of issues are few and far between, but they do occur. It is better to be aware of them and understand that until all the documents and forms are signed and money exchanged at closing, the sale of the home is not complete.
For further questions about the closing process or to apply for a home loan, please feel free to contact A and N Mortgage at (773) 305-LOAN (773-305-5626) to speak with one of our mortgage brokers today!