What you may need to have with you at the closing table
There is great wisdom in the motto “always be prepared.” It is important whether you are in the market to buy a house for the first, second or third time.
As we've discussed in the past, buying a house is composed of a series of processes, from mortgage shopping, applying for a loan, looking for the right house and making an offer. As its title suggests, closing is the culmination of it all, where the seller, buyer, listing agent and other parties sign the paperwork to make the transfer of ownership official. Here are a few of the things — and people — you may need to have readily available at the closing table and why:
Your closing team
While you may be the one living in your house, several people help make closing on your home happen and you may need to have them with you during closing. These individuals may include an escrow officer, attorney, title insurance agent, real estate agent and your co-signatory, among others. These are generally the main people involved in closing transactions. The seller will have their team assembled as well. Your real estate agent and/or loan officer should be able to assist in making sure the necessary parties are there. The closing company involved in the transaction will also be able to provide guidance.
The proper materials
There’s a lot of paperwork at the closing table; all the i's must be dotted and t's crossed. Here are some items that you may need to bring, as recommended by the Consumer Financial Protection Bureau:
A cashier's check or proof of wire transfer
Personal identification, such as a photo ID or drivers' license - (Your current photo ID proves who you are and protects against fraudulent transactions)
Each of these items serves a specific purpose. For instance, mortgage companies require you to purchase homeowners insurance as a precondition to extending a loan. The declarations page of a homeowners insurance policy should be sufficient verification you've done so. You may also need to show documentation that you're up-to-date on your premium payments.
A cashier's check from your bank is traditionally used to cover certain closing expenses. Some of these funds, for example, may go toward the down payment. Plus, a cashier's check guarantees you have the funds to cover the expenses. These are also called certified checks. Wire transfer is another method of doing this and is often leveraged for security purposes.
Your checkbook is mainly "just in case." This is typically used to reimburse the seller for gas or propane that may be left in the tank.
Other things you may need
It's safe to say that no two closings are perfectly identical. With so many moving parts, some things or people you may need for one may not be relevant for another. What may be required is documentation associated with the home inspection. As Homelight notes, there are usually two home inspections: One is paid for and handled by the seller, and the other by the buyer. They also generally happen at different stages. The seller's inspection normally takes place prior to putting the home up for sale; the buyer's occurs upon placing an offer on a home.
Depending on the findings on the inspection, the terms of the purchase agreement may change, such as if there are safety issues or repairs that need to be taken care of. Ideally, these problems can be addressed before closing, but they may be hashed out at the closing table. For instance, a buyer may decide to take care of required fixes that would normally be the seller's responsibility. This is a scenario where it pays for both the seller and buyer to bring their checkbooks.
Ensuring a smooth closing experience is all about knowing what to expect. At Residential Mortgage Services, we'll help you every step of the way. Contact us today.