Learn how you can prepare for your closing and what is most important when it comes down to the paperwork.
When it comes time for closing, the hardest part of owning a home is now over. You found the perfect home, the price is negotiated and the mortgage is secured. The only task left is to make the transaction official with the closing paperwork.
First things first, make sure to ask your realtor or broker for a checklist of what you need to do or have before heading to your closing so that you are fully prepared and all documents that are necessary are collected and submitted.
Before you head to the closing process, you will perform one final walk through, usually within 24 hours before you plan to sign the papers. “You will go to the property, make sure nothing is damaged or wrong with the property and nine times out of ten, there are no problems,” said Matt Laricy, real estate broker at the Americorp Real Estate. If there is something that was hidden when you first viewed it, you and your agent will need to make sure it is taken care of first which may slightly delay the process.
If you are buying a condo, you will want to review the financial situation of the condo association. A buyer does not want to take on a condo that has major maintenance coming up or isn’t doing well financially.
“Upcoming projects for a building that are not funded such as a new roof, new elevators, new lobbies and hallways, are red flags. If there is no money set aside for those projects, the buyer will incur those before they get into the building,” said Eric Marcus, managing broker and owner of Eric Marcus Real Estate Group.
Expect the closing process to take a long time and be prepared. Give yourself plenty of time—at least a few hours—so that you are not stressed during the process or needing to leave for another commitment. If you are the kind of person that wants to look through every detail, it will take you some extra time to finish signing. In addition to your review process and signatures, the bank will also need to approve the deal before the sale is final.
Depending on where you live can determine who will physically be in the closing process with you. You could be sitting down with the seller, seller’s agent as well as yourself, the real estate agent and an attorney. In Illinois, an attorney will need to be present. You can choose to hire your own or have your real estate agent provide a suggestion for you.
“In the Chicagoland area it’s pretty typical that an attorney is involved. The broker will have a list of attorneys for you to use, or you can use whoever you’d like,” says Marcus. What he recommends you shouldn’t do, is have a family member or friend who is a lawyer but does not specialize in real estate, help look over your paperwork.
What you can expect at the closing is that you’ll be signing your name or initials a lot, on many pages. Laricy explains, “The Loan Package can be 50-100 pages of signings and then there will be closing documents.”
The Closing Disclosure will have most of the important information that many buyers are concerned with. Make sure you at least review this section and that everything looks correct--from the price, monthly payments, interest rates, and everything you previously decided on.
“You’re not going to change anything at this point in the process, but you should look over the numbers you decided on and point out if any of them are wrong,” said Laricy.
You will also want to check all of the disclosures so there are no surprises. For example, the heating disclosure can tell you how much your heating bill will be based on past owners and you will want to be aware of this for your own monthly budget.
“It’s important to look for any rental restrictions in case someone wants to consider renting it down the line or if they are an investor. In addition, restrictions on pets are also critical if you plan to have one or get one while you live there,” said Marcus.
Although it can be a painful and tiring process signing your name on so many pages of legal information, after it is over you will officially be a homeowner.