What To Expect At The Closing Table
1. Can I inspect the property just before closing?
Yes. On the morning of the closing it is customary & recommended that you should make a final walk-through or inspection of the house & property. Check all appliances, windows, doors, etc. Verify that any personal items: furniture, curtains, shades, etc. that were included in the sale are still in the house. Be thorough. Tell your attorney about any changes in the condition of the house between the time you signed the contract & the final inspection. If problems are not resolved prior to closing, they will be almost impossible to resolve afterwards.
2. What are the closing costs?
Closing costs are fees the buyer pays to the mortgage company, the title company, & the buyer’s attorney for their services at the closing, including points, taxes, report, inspection, & documentation fees. Usually the seller pays the broker’s commission.
3. How much can I expect to pay in closing costs?
Generally closing costs range in the +2% range of the purchase price. They could go as high as 5% or more.
4. Who attends the closing?
The buyer’s attorney will attend the closing to make sure the terms of the contract are adhered to & the proper sums of money paid. Other attendees are: the title company representative, the real estate brokers, the attorney for the seller, the attorney for the mortgage company, & the buyer & seller.
5. What happens at the closing?
The closing is the event at which the buyer receives all the documents required to convey title of the home from the seller. These documents are reviewed by the buyer’s attorney at the closing table to make sure all the conditions & promises are met. Also at this time, the balance of the purchase price is paid & the keys of the house are delivered.
6. How are the real estate taxes apportioned between the buyer & the seller?
Real estate taxes are usually paid once or twice a year by the owner of the property or the mortgage company. The date of the closing is used as a guideline for dividing the tax responsibility. If the seller has already paid the taxes, a portion of the money is returned to the seller using the date of the closing as the apportionment date. If the taxes have not been paid, the seller must pay for the portion of time he or she was in possession of the property, leaving the balance to be paid by the purchaser.
7. How are liens & judgments satisfied?
At the time of closing, a portion of the proceeds go to pay off any outstanding liens & judgments. The title company will collect that money & a satisfaction letter from the lien of judgment holder will be supplied. The title company will make sure the money gets to the lien holder & that the satisfaction letter is recorded in the public records of the county where the property is located.
8. Must I bring a certified check to the closing & why?
Usually a certified check, a bank check, or a check from the attorney’s escrow account will be acceptable at the closing. These types of checks are considered cash, eliminating the waiting period banks require for personal check clearing time. Sometimes, arrangements are made to wire funds to the attorney’s escrow account, so that he or she can bring these checks on the buyer’s behalf.
9. Should I change the utilities (electric, phone, oil company, etc.) into my name?
Yes. As soon as you know your closing date, you should notify the utility companies regarding the change of name/service. The companies will use the date of closing to prorate their bills for usage. The buyer may want to change the level or type of service that the seller used.
10. Can I take possession of the house prior to closing?
If the seller is willing to allow the buyer to take possession of the house prior to closing, a lease can be drawn up between the parties, allowing the buyer to take possession of the house until the closing. The attorneys will prepare the lease. The buyer must obtain homeowner’s insurance as of the date of possession in this case, not the date of closing.
11. Can the seller stay in possession of the house after closing?
Only if the buyer gives the seller permission to do so. Again, a lease would be written up by the attorneys. In this case, the seller’s homeowner’s insurance should remain in effect until the seller vacates the property.
12. Who is reponsible for paying the broker’s commission?
Usually the seller pays the commission. However, in some cases, the buyer will pay their broker. In that case, the buyer would pay their broker’s commission at the closing.