Preparation for Closing; A Buyer’s Pre-Settlement Checklist
By Marc Shaw
Typically, at the closing the buyer(s), seller(s), real estate agent(s), attorney(s) and loan officer(s) meet at the offices of World Wide Land Transfer or another location properly agreed upon with a settlement attorney to finalize the transaction between the buyer(s) and seller(s). While at settlement the buyer(s) and seller(s) will be presented with various documents for their signature. Among the documents that will be signed are the HUD-1 Settlement Statement, the Deed, and all of the lender’s loan documents including the note, mortgage and various disclosures.
The settlement attorney or closing agent will explain all the necessary documentation to the parties. All monetary adjustments and proration’s between Buyer and Seller will appear on the settlement statement. If any disputes between the parties should arise at settlement, the settlement agent will provide a forum for those parties to resolve their differences. It is our goal to make sure everyone leaves the closing pleased with the transaction.
- Walk Through: Your attorney or realtor should make arrangments for a pre-settlement walk through. At this time the water and gas meters should be read so the proper adjustments can be made at closing by the title insurance company. Both gas and water are lienable in many municipalities.
- Funds: Any proceeds owed at closing should be brought in the form of a bank check or wire. Please be sure to check with the title company prior to closing to be sure you know the correct amount still owed. Often times buyers will be moving money from a investment accounts which may take a few days. Please consider this when approaching the settlement date.
- Homeowner’s Insurance Policy: Obtain a homeowners insurance policy in favor of your Lender using their mortgagee clause. This is usually requested by your lenders underwriter well prior to settlement, but at times this can be an item which delays settlement if not properly accounted for. Bring a paid receipt if it is paid for already, otherwise the lender may insist that the title insurance company collect for the annual fee upfront on the HUD-1.
- If a Homeowner’s Warranty is being purchased either for you by a builder or seller or if you are purchasing it directly you will want to make sure this is paid for at closing. An invoice should be supplied to the title company prior to closing.
- Don’t forget your state issued driver’s license with picture and/or other picture identification if the title company requires 2 forms. Many lenders now require the title agent to supply them with a second form of ID. Your attorney should warn you ahead of time.
- When you are selling a home and then purchasing another home back to back, most lenders will require a copy of the deed and HUD-1 Settlement Statement from the initial sale, if need be please make sure you have copies brought to your purchase settlement.
- Contact the postal service to change your address. www.usps.com
- Arrange to have all utilities changed over to your name on the day of settlement. This includes, water, electric and gas.
- GFE: Although the new 2010 Regulations require the HUD-1 to clearly decipher what was disclosed to you versus what you are actually being charged with at settlement, it is always a good idea to actually bring a copy of the GFE (Good Faith Estimate) that was mailed to you. This way you can confirm that you are being properly charged.
- If you are not planning to attend closing, be sure to notify the Title Insurance Company directly. They will have to either provide you with or approve a Power of Attorney. And please make sure the title company has the original either prior or at settlement!
- Last but not least, be happy! The closing process is somewhat a formality but in many ways can be grueling if not properly prepared for. Either way, be happy, you are about to be a new home owner! Whether it is your first home, a new start, your dream home or your retirement home, it is the start of a new chapter in your life. Embrace it and it will embrace you!