How to Close on a House

Once the Purchase Agreement is signed by both parties, you then enter the process of actually buying the property. This final part of purchasing a home requires getting a number of critical things accomplished in a period of 3-5 weeks.


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    Secure your financing. You were pre-approved. Now it's time to actually secure the loan. You’ll need the paperwork you gathered together for the pre-approval, as well as tax returns, pay stubs & any other documentation showing proof of assets. Your real estate agent and your loan officer can talk you through what you’ll need and show you various options for financing. This step will take several weeks, so don’t delay!
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    Take a final look. The day before the closing, your Realtor should walk you through the property. Ensure that you will be getting the property in the condition you expect it to be in before the closing. It’s also an opportunity to confirm that all work required in either the Purchase Agreement or as requested after the Home Inspection has been completed and is acceptable to you.
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    Estimate out how much cash you will need. The cash may be used to cover closing costs and the down payment, unless some of these expenses are covered by the seller or will be included in your mortgage loan. Several banks require ‘seasoning’ of funds, which means that the money actually must be in your account for 60 or more days. This is why it’s important to gather your cash now. Before the closing, the Title Company will tell you exactly how much money you will need to bring in the form of a cashier’s check.
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    Read the closing documents. There are numerous papers to sign at the closing, so make sure you slowly read the documents a day ahead of time. So that all you’ll need to do at closing is sign them and then pick up the keys to your brand new home!
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    Book the home inspection. This step needs to happen within 7-15 days of the purchase contract, and this is also the time to schedule a termite inspection and a gas line warranty. Make sure you may accompany the inspector while he or she walks through the house. The inspector will explain to you what he’s looking for, and this will make you a much more knowledgeable home buyer. The inspector will also provide you with a detailed written report that will list any problems needing remedies.
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    Get homeowner’s insurance. If this will be your principal residence, you can include the policy as part of your monthly mortgage payments, along with your property taxes. This is commonly called an “escrow account.”
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    Appraise the house. Your bank will take care of this for you. Hopefully the house appraises for the price you are agreed to pay. If the house appraises for less than the selling price, you will either have to come up with the difference as an additional down payment, or you need to renegotiate the Purchase Agreement. Fortunately, most Agreements have a contingency clause for this situation.
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    Schedule the closing. The end of the month is by far most hectic for Title Companies and lenders, so if you can, schedule your closing earlier in the month. Keep in mind though, some of your closing costs might be a little higher if the date is early in the month. When setting a closing date, remember that your first mortgage payment will be due on the first of the following month (closing 9/15, first mortgage payment due 11/1). In addition to setting your closing date, agree with the seller on a move-in date.

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Categories: Buying Property