Closing Day

 

By Diane Saatchi

A lot can happen at a closing. I’ve seen engaged couples break up. I’ve seen separated couples get back together.

But your closing? With good preparation and some luck, your closing will be boring.

A closing is exactly what it sounds like: It’s the final step of a real estate transaction. Usually, the buyer and seller and their respective attorneys sit around a table with the title agent (also known as the title closer) and, if the buyer is using a mortgage, the bank’s attorney. Once the many documents are signed, the seller turns over the deed and keys to the purchaser, who is then the rightful owner of the property.

The walk-through

The day before or the day of the closing, before you ever get to the table, you, the buyer, will visit the property one last time for the walk-through. It happens after the seller has removed the contents and left the house “broom clean.” It’s the buyer’s chance to make sure everything is as was (minus the contents) and to make sure the house is still there. It’s best to go yourself, and to see it with your own eyes. By the way: The real estate agents and your lawyer will not do this for you.

Be prepared: If this is the first time you see the house without décor, however much you did or did not like the seller’s interior design, the house will look different — sometimes much improved, sometimes eerie, but for sure different. Don’t be surprised to see signs of faded paint where there were wall hangings and discolored flooring where area rugs once were.

At walk-throughs, some buyers think they need to re-inspect. They may, for example, turn every appliance and light switch on and off and open and close every window, but I don’t recommend it. It’s time-consuming, and likely to turn up minutia. And even if you think you checked everything, you couldn’t get everything.

Look at it this way: You’re paying a fortune for a house and maybe you find $300 worth of repairs? Getting the attorneys to work out an escrow agreement for $300 is going to cost you more than that. Better to look at the big picture. Has everything been removed, is the house standing, is the roof free of leaks and is the basement dry?

Finally, the closing

Once you get to the closing (which is traditionally held at the bank’s attorney’s office but can be held wherever the parties agree, provided they are willing to pay for lawyers’ travel time) you start signing papers. The papers are a collection of forms and checks. The forms are to transfer ownership of the house. The checks are to pay the parties involved in the deal, as well as fees like property taxes, which some lenders require be paid advance, and utility adjustments, like the cost of a half-full fuel tank that comes with the house.

This shouldn’t come as a shock, though. Early in the process, your lawyer will give you an estimate of closing costs. You won’t pay for the actual house here, because large sums like that generally need to be paid through certified checks or wire transfers.

The wire

The purchaser may “set up” the wire with his bank, but it won’t be released until the closing is underway. The parties usually finish the transaction long before the wire “hits” the seller’s bank. Whenever possible, if payment is to be via wire, it is better to schedule the closing early in the day but for sure, never on a Friday afternoon or a day before a bank holiday.

Bring your checkbook and two forms of photo identification to the closing, to prove that you’re you, the person who should be buying or selling the house.

If everything goes smoothly, it can take less than an hour — but expect to be there for a few hours, just in case. Often, this is not only the first time the buyer and seller meet, but also the first time they meet their attorneys and sometimes even their brokers in person. A lot of real estate deals are conducted over the phone, and this is the first and only time everyone is in a room together. If there had been some bad feelings along the way {link to http://www.dianesaatchi.com/blog/2017/1/19/why-things-go-wrong-between-buyers-and-sellers2017], they are usually long forgotten and most of the time the fact that there is a closing puts everyone in a good mood.

If there’s no mortgage involved, or the buyer and seller are in different locations or otherwise not available for the closing, it’s possible to sign papers before and/or give attorneys power to sign on their behalf.

Back at the conference table

Everything feels very official, what with the title closer checking ID and lawyers explaining everything you sign, which is why I always think it’s funny how the typical closing winds down. Invariably, someone will ask the question that adjourns the group: “Are we finished?”

With any luck, you are.


© 2017 Diane Saatchi