This is the twelfth article in my series called Buying a Home 101. This step-by-step series will take you through the entire home-buying process — from finding a buyer’s agent to settlement day, and even maintaining your home after you’re all moved in.
You are almost a homeowner! But before you can celebrate, you’ve got to gear up for a successful settlement day. And that means no surprises, no delays, and you walk out with the keys to your new home.
There is a lot to do in the days leading up to your closing and settlement. You’ll be better prepared and on top of everything if you know what to expect.
Here’s what you need to do at each stage of the process:
Pre-Closing Tasks to Complete:
Get homeowner’s insurance. Make sure that it starts the day of the closing; no later, even if you are moving in later.
Don’t hurt your credit (loan!). Do not do anything that could change your financial circumstances, such as opening a new credit card account, getting a new auto loan, or charging too much on your current credit cards. Even buying furniture before your settlement is a bad idea. This could delay or even cancel your mortgage. So hold off on any shopping sprees for your new home!
Connect your utilities. Make sure you make it effective for the day of settlement, even if you are moving in after settlement. The seller will turn them off in their name the day of settlement since they will no longer be the owner of the home. To avoid any re-connection fees, make sure the utilities start in your name the day of your settlement.
Give yourself enough time to move funds around. Please be aware that banks typically put at least a 3-day hold on large transfers. If you’d prefer to wire your funds directly to the title company instead of bringing a certified check, get the instructions from your agent.
Settlement Day To-Dos and Logistics:
Your Final Walk-Through
You will be allowed to do a final walk-through of your home prior to closing. Schedule it earlier in the day so you can complete it before you head over to the actual closing. It should take about 30 minutes.
This is your opportunity to see if any damage has been done to the property and if any agreed-upon repair work has been completed. Carefully go through the home this last time to see if anything is amiss since you have the opportunity to bring it up at your settlement (not afterward!).
You are not doing another inspection, but just making sure that any repairs that were agreed upon have been done and ensuring the home is still in the same condition as when you wrote the contract.
What to Bring to Closing
- Bring your driver’s license or some form of photo ID.
- The settlement company will calculate the amount of money you need to bring to the closing. You’ll need to bring a certified check for this amount. Also, make sure you also bring your checkbook just in case any minor last-minute corrections need to be made.
- Bring all important documents that you have gathered during the home-buying process, proof of homeowner’s insurance, contract.
- Obtain a copy of the Closing Disclosure form (it replaced the HUD-1 Settlement Statement). This form lists all final terms of the loan you’ve selected, final closing costs, and the details of who pays and who receives money at closing. Your lender should send you a Closing Disclosure at least three business days before closing. It looks something like this.
What to Expect at the Closing
You and your agent should plan to attend the closing at the specified time at the settlement company’s offices. The sellers also will be there with their agent. Many closings can take more than an hour, so plan accordingly if you have to take off from work.
This is the day where the sellers will legally transfer the property to you. The settlement company acts as a third party overseeing the terms of the contract to ensure they are being carried out and the transfer of ownership occurs. They don’t represent you or the seller, but the terms of the contract.
This company also handles the closing process for that day. This is to ensure that all parties involved (you, the seller, your agent, their agent) can properly oversee the transaction.
The settlement company will handle the documents, money, and any other items from all parties and make sure that everybody gets paid where necessary.
Stay calm! You will be signing a lot of documents that day so make sure you understand and know what you are signing. Ask questions and confirm amounts if necessary!
Congratulations … You bought your home!
You’re all set to move into your new home now that you’ve made it through your settlement. It’s time to celebrate and start unpacking.
Now that you’re a homeowner, you’ve got to take care of your new home. Next week’s bonus article, Maintaining Your New Home, is perfect for you. This is my last article of my Buying a Home 101 series. I hope you now know what you can do to become an informative and confident buyer in today’s market. Remember, I’m here to help you along the way!