Your 10-Step Pre-Closing Checklist

By: Marilyn Haber, Brokerage Owner/Agent, Country Mile REALTORS

Congratulations! You’re in the home stretch and will soon be a first-time homebuyer.

But, before you celebrate and before you take the keys to your new home, there are a few very important steps you must complete first. This 10-Step Pre-closing Checklist is something I and my team at COUNTRY MILE REALTORS use to help ensure our buyers are prepared when they sit down at the closing table.

Review Contingencies

Contingencies are a real estate term that simply means your home-buying prerequisites and includes your home inspection, appraisal, and financing. At this point, you should have already been pre-approved for your loan, had a home inspection, and an appraisal, confirming that the home you’re preparing to buy is appraised for the purchase price. Remember, you’re about to borrow a big chunk of money, so be sure you understand what’s involved.

Mortgage Musts

Be sure to review your Loan Estimate with a fine-tooth comb, paying careful attention to estimated costs, fees and down payment. Now is also the time to ask any questions or broach any concerns you may have with your lender because when you sign on the dotted line at the closing table you’re legally committed to your mortgage loan.

If you’re taking out a mortgage and haven’t done so already, this is also a good time to lock in your mortgage interest rate.

Confirm the Title’s Clear

Prior to closing, the title company will make sure the home you’re about to buy is free of any legal encumbrances, like liens, disputes, or easements. As a Broker Realtor, I reinforce this with my clients and team because the last thing the buyer wants to learn is the property they just purchased has a lien against it.

Why is that a problem? If a property title isn’t clear that often translates into a messy, expensive, and drawn out road ahead. The lender financing your home typically requires lender’s title insurance and orders a report from a title company which will review all existing records, including deeds, mortgages, liens, divorce settlements, and other public documents.

Consider Owner’s Title Insurance

As an additional layer of protection against title issues, I recommend purchasing Owner’s Title insurance.  Owner’s Title insurance can protect you and cover any unexpected expenses in the event a title you thought or were told was “clear” turns out not to be.

Get Homeowner’s Insurance

Up until you sign on the dotted line at closing, the seller’s responsible for maintaining adequate homeowner’s insurance coverage. But, after closing, as the home’s new owner, you’re responsible. And, you need to have proof of homeowner’s insurance before finalizing your mortgage. At COUNTRY MILE REALTORS, we can provide you with a few insurance companies in the area, but shop around. One tip: if you’re happy with your auto insurance provider, you can ask them about their policies for homeowners. What’s more, they often have bundling discounts.

Closing Considerations

About a week before your closing date, your agent will confirm with you when and where the closing will be held, and what time it’s scheduled.  Make sure you have the necessary funds available prior to closing. Find out how you’ll be paying, whether that’s a cashier’s check or a wire transfer. If the amount is $10k or more you will need to wire the funds to the title company.  In general, ask the individual who’s handling the closing what’s required, so you’re prepared.

Review Your Closing Disclosure

Closing Disclosures can be intimidating. They’re extremely detailed, are comprised of multiple pages that outline the details of your loan, including an itemized list of costs associated with your purchase. Your lender will supply you with the Closing Disclosure three business days before your closing. In essence, it’s the updated final version of the Loan Estimate you received. Review the Disclosure document carefully and ask any questions or address any concerns with the lender prior to the day your closing is scheduled.

Take a Final Walk Through

I make a point of prioritizing the final walkthrough with my clients. Why? If repairs or other actionable items were conditions following the home inspection, the final walkthrough will confirm whether these were addressed as promised. Typically, the final walkthrough takes place a couple days before closing.

Remember, no matter how smoothly you think everything is going, this is your final opportunity to verify that the home is in the agreed-upon condition and will protect you against any unwelcome surprises when you unlock the door to your new home.

Assemble Your Closing-Day Documents

You’ve probably heard this simple rule when it comes to preparation: Prepare. Prepare. Prepare. Well, it’s true and because you’ll need several important documents the day of closing, I recommend putting all of them in a folder, so you’re not rushing around the day of closing, trying to find everything. Here’s what you’ll need:

• A cashier’s check or proof of wire transfer for the exact amount.
• A photo ID. This can be your driver’s license, passport, or a government-issued ID.
• Your copy of the Closing Disclosure. You’ll want to compare it to the final documents.
• An advocate who’ll sit with you at the table. This can be a trusted friend, a lawyer, etc.

Closing Day

Closing Day can be stressful. There are a lot of documents you’ll be asked to sign.   You may feel pressured to move quickly through the process. But, a word of caution: take all the time you need. Read through the documents at your pace because it’s your right. Trust your instincts.  At the closing discuss  possession date/times, transfer of keys, utility transfers and any particulars pertaining to the property.

After the paperwork’s been signed and completed, take a moment to breathe and congratulate yourself. You made it! You’re a new homeowner! Make sure to save your closing documents. In addition to hard copies, Title Agencies will often give flash drives to buyers with digital closing document files.

Now, if you received possession at the closing, all you have to do is take the keys to your new home and unlock the door to a new life as a homeowner. Congratulations! At COUNTRY MILE REALTORS, we’ve helped thousands of buyers and sellers realize their real estate dreams. If you’re interested in buying or selling, we’d love to chat with you and look forward to meeting you!