Buying your new home: closing and taking possession
The final steps in the process of buying your new home are to pay for your property, sign any remaining loan documents during the closing appointment and then take possession of your new home. The actual closing process will be managed by an escrow officer or real estate attorney. Their role is to ensure that the appropriate funds change hands between all parties (buyer, seller, buyer’s lender and seller’s lender) and to make sure that title to the property is properly transferred. They act as a neutral third party to the transaction.
A week or two before closing, depending on the exact schedule and how busy the escrow officer is, you will receive an email or letter asking for information from you before closing. The escrow company will want information about your mortgage lender(s) and your insurance company. Your lender will give instructions for how they will provide funds and for their paperwork. They will also instruct that your homeowners insurance be in affect the date of closing. The escrow company will also tell you how to provide funds for closing which are typically either a cashiers check or a money wire.
The exact date you need to come in to close on your new home won’t be set until a few days prior to the actual closing date. That is because the paperwork from your lender tends to drive the end-game. In particular, there is almost always a last minute rush by your lender/loan officer to get paperwork from you. They will also prepare an estimated HUD-1 statement which lists out the exact costs for everyone and the amount of money you should bring to closing (again, as a cashiers check or a money wire).
At your closing appointment, you can expect to have some hand cramps. Because of your loan, you will have a lot of paperwork to sign. Your bank may even want you to resign all of your offer paperwork.
Once everyone has signed the paperwork, then the escrow officer will send a copy to your lender. Assuming that everything is signed appropriately, the lender will fund the loan, meaning they will wire the money to escrow
Once the escrow officer actually receives the money, they will release documents for recording to the county. After they receive recording numbers confirming that the property legally transferred hands, they will distribute the funds to all appropriate parties.
Once the recording numbers are ‘in hand’, you can have the keys to your new home! Your agent, if you have one, will arrange to get the keys for you or you might just pick them up at the office of the listing agent. The property has now officially changed hands. Congratulations!
Immediately after closing be sure to take these steps:
- Change the locks: You don’t know who might have keys to the home.
- Switch the utilities into your name: It would not be enjoyable to have your power turned off while you’re in the middle of moving.
- Change your address: Fill out change-of-address forms and call your banks and credit card companies so that they know to send mail to your new address and not to your old one.