Home Buying 101: The Closing

A large portion of my day-to-day business as a Realtor is focused on working with first-time home buyers. In the past two years, I’ve even taken to teaching a “Home-Buying 101” course to help inform those property newbies on the in’s and out’s of purchasing their new home.

While most buyers are strictly interested in the initial search phase of the process, the one question that inevitably crops up is “What’s a closing?” While the term may sound a bit dire, the truth is that a closing is simply the legal transfer of a property. In many states it’s referred to as a “settlement.” Bottom line? You take possession of your property and get the keys to your first home!

Here are some of the most frequently asked questions about a closing:

·        What happens at the closing? Warm up your signing hand because you’ll be asked to sign a big pile of legal documents. You can rely on your attorney to review these documents with you and answer all your questions. The documents include (but aren’t limited to) the HUD-1 settlement statement (frequently referred to as “the HUD”) that details all the funds exchanging hands at the closing; the mortgage note; the deed of trust; a truth and lending statement; a copy of your mortgage application; and, any and all related riders and affidavits.

·        Who attends the closing? Usually the attendees include you (the buyer); the seller; the real estate agents representing the buyer and seller; the attorneys for both sides; and, the closing agent (most often another attorney representing the lender). At one of my last closings we had the buyer’s dog in attendance!

·        Where is the closing held? Closings are most often held at the registry of deeds for the county in which the property is located. For instance, if you buy a home in Boston, your closing would take place at the Suffolk County Registry of Deeds, located near Government Center. If all parties are in agreement, oftentimes the closing can take place at an attorney’s office.

·        What do I need to bring? Typically buyers are asked to provide proof of identity (your driver’s license will do); a cashier’s check as payment for closing costs; and, a strong, steady hand to deal with all the signing you’ll have to do.

Once the closing is completed, you’ll receive a copy of all the documents you’ve signed, a set of keys to your new home and a big hug (at least I like to give a hug). It’s critical that you keep the copy of your documents in a safe place for future reference. If you were to lose the docs, your attorney can always make you another set. Keep in mind too that many of the closing costs are tax deductible so you’ll want to provide some of the paperwork to your accountant at tax time.

Interested in learning more about buying your first home?

Sign up for my FREE “Home Buying 101” Class today!

For complete details, email me at Michael.Pallares@newmoves.com