President’s Column, Texas Association of REALTORS®
You finally found the perfect house and your offer was accepted. Now, all you need to do is sign your name a few times and you get the keys, right?
Unfortunately, things don’t always go as planned.
What if your closing isn’t the smooth-as-silk process you’ve imagined? I’m not saying it’s common, but things do happen, so it’s to your advantage to be prepared, just in case.
All about closing
Closing is a process that begins weeks before the actual closing date, and follows an outline dictated largely by the buyer’s original offer to the seller of the house. The sales contract covers the key elements of the settlement or closing. Closing costs will likely include most of the following:
* Charges for establishing and transferring ownership. These include title search, title insurance and related escrow fees. Title insurance is also part of closing and can be troublesome if the seller doesn’t have a clear title to the property. Your lending institution won’t give you a mortgage loan on a house unless you can prove that the seller owns it. This proof comes in the title search.
* Amounts paid to state and local governments. These include city, county and state transfer taxes, recording fees and prepaid property taxes.
* Costs of getting a mortgage. These include appraisal, credit checks, loan documentation fees, notary charges, loan origination, underwriting, commitment and processing fees, hazard insurance, interest prepayments and lender’s inspection fees.
Anticipating closing costs
This laundry list of potential charges can seem daunting, but your mortgage lender will give you a Good Faith Estimate of all your closing costs within three business days of your application for a loan. You’ll also get a statement of your actual costs a few days before closing – so you know just how much that fat check should be when you get to closing.
What if closing is delayed?
There are times when closing can be delayed by weeks, through no fault of your own. This is a bad thing, as it could affect any interest rate you have locked in (most locks are for 30 to 45 days). Have a back-up plan for such a delay, such as another lender in your back pocket.
Make a list and check it twice
We all know people who are fanatical list-makers. They keep little pads and sticky notes everywhere, but it works for them.
Even if you’re not into lists, making one for closing day is a good idea.
Here’s what you’ll need, both on the buying and selling side:
Buyer’s closing checklist
* A certified check or money order for the amount specified on your final settlement costs statement
* Your personal checkbook in the unlikely event other charges come up at closing
* Proof of a homeowners insurance policy for the new house
* Your lender’s Good Faith Estimate
Seller’s closing checklist
* Keys, padlock combinations and garage door openers
* Codes to security system
* Owners manuals for all appliances
* Checkbook for closing costs or other expenses paid by seller (as agreed to as part of the buyer’s final offer)
Ask your Texas Realtor and your lender for more information about what you’ll need at the closing table. Their experience can go a long way to ensuring a smooth transaction, which is to everyone’s advantage.
Follow these tips, be prepared, and chances are you’ll be smiling at the end of the day. No one wants this to drag out … believe me.
For more information about buying and selling property in the Lone Star State, or to find a Texas Realtor, I invite you to visit TexasRealEstate.com.
by Amy DuBose, RCE
San Marcos Area Board of REALTORS®