The Closing Timeline From Contract To Keys
Once you have located that perfect home to submit an offer on and the seller accepts, now the closing process starts. The average closing takes about 45 days nowadays, sometimes faster if you are paying cash. For the majority of buyers who are financing, here is a helpful timeline so that you can cross check your to do list and begin planning.
Contact a lawyer
Real estate deals involve legal contracts and the handling of escrow funds. You will need to hire an attorney to handle all of this for you. Local attorneys are always best as they are familiar with local properties and easily reachable. This is also the time that title review will begin.
Pay earnest monies
Your attorney will hold your deposit that you are putting down towards your down payment and place that in escrow. This money is either wired or given with a cashier’s check.
Complete loan application
You would have completed some basic information to get prequalified for a mortgage, but now is the time to officially complete the loan application and provide all supporting documentation such as pay stubs and tax returns.
Review loan estimate
The lender will provide you with a good faith estimate of the loan and all of the terms. Be sure to double check all details such as your name, the rate and term so that it is what you want and is accurate.
Order home inspection
A home inspection is always a good idea to do so that you know exactly what you are getting into. Any major red flags will be uncovered so that you can further negotiate if need be.
Your lender will order the appraisal (at your cost) to be sure that the home is really worth what you are paying and they are lending for. The home must appraise for at least the sale price to receive your home loan.
Lock in loan rate
You can typically do this once the home is under contract but once your inspection and appraisal are finished then nothing else should change so locking in is usually a good idea.
Get homeowners insurance
Insurance is a must to close on the home when a lender is involved. Shop around and pay attention to coverage amounts when comparing. If you are in a flood zone you may be required to have separate insurance for that as well.
Review closing documents
At a minimum of three days prior to closing the lender will provide you with the closing disclosure document. This will spell out all fees so review this and be sure everything is as you expected. Notify them immediately should anything look inaccurate.
Arrange wire transfer or certified check
Personal checks are never accepted for the money due at closing. These days most attorneys will provide wiring instructions, or if not then require a cashier’s check. Be sure that you make arrangements for what is required a couple of days before the closing.
Plan ahead and make sure that you contact utility companies well in advance that you are taking possession of the home on your closing date. You don’t want an interruption in any essential services.
Right before the closing and after the sellers have vacated is the right time to do your final walkthrough. Make sure everything is working properly, as it should be and that no damage was done by the sellers upon moving out.
Attend the closing
Finally, bring your favorite pen as you will be doing a lot of signing! Also have your ID, copy of insurance, closing disclosure and any other items requested so that you are well prepared. Once all has been signed and filed then grab your copy of the keys and enjoy your new home!