Countdown to Closing
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So now that the clock is ticking and we officially have a binding agreement…
With the recent changes to the GAR contracts, you no longer have until closing to settle all your financing issues and get final approved for your loan. This makes it more important than EVER to talk to a lender BEFORE starting your home search. As I mentioned in The Binding Agreement, you have a much more limited time to apply and get final approval on your loan – this includes the process of providing your lender with all required documents to get your loan approved through the lenders underwriters, such as tax returns, W-2 forms, pay stubs, bank statements etc.
Your lender will tell you this and I will stress here: NEVER do anything to alter your financial position and/or credit score after you get loan approval until after you CLOSE on the house. This means no furniture purchase, no car purchase, no appliance purchase, no application for a new credit card, no shopping sprees on existing credit cards. Nothing. Any alteration in your financial activities can change the guidelines by which you were approved for your loan. Don’t mess this up!
In Georgia, an attorney must close the real estate transaction. Other states have other methods such as title companies and even Brokers who can close the transaction. Technically, the closing attorney represents the Lender. Yes, the Lender, not the Borrower/Buyer… if there is no loan involved, the parties may decided whom the attorney represents.
The Closing Attorney is responsible for obtaining a Title Search on the property, getting pay-off amounts from the Seller’s mortgage company and completing and ensuring the HUD-1 Settlement Statement is in line with the information from the contract. He draws up the new deeds transferring title and usually records the deeds after closing before sending final copies to the Buyer. The HUD-1 Settlement Statement is required by law specifying the costs of closing for the Buyer where it is all going, how much the Seller will receive, less any fees and other charges. What goes on this document and how is tightly regulated. You should be able to receive a copy of this at least one day prior to closing so you know in advance how much money you need to bring to the closing table.
Remember, always get a Cashier’s Check from your bank for your entire closing amount or contact the attorney for wiring instructions several days in advance to ensure the funds will be there on time. Personal Checks are not normally acceptable at closing.
Meanwhile, leading up to all this, you and your agent will most likely have been dealing with inspection issues and repairs. Your agent should schedule a final walkthrough of the property for the day prior to closing. This is when you have the opportunity to check that all repairs have been made. If the repairs required were large or serious things, you may want to ask your home inspector to go back through to make sure everything is working properly or is up to code. This is also the point at which you can check to make sure everything in the house is as it should be according to the sales contract. Example: the dining room chandelier is still in it’s place and was not replaced with an inferior substitute, the window treatments are all still there… basically everything the Seller said they would leave is still there. If the Seller agreed to have the house professionally cleaned, then make sure it has been done. Should something be amiss, it needs to be addressed and could delay the closing.
Your agent also should be keeping up with the attorney’s office to schedule the closing and keeping in contact with the Sellers or Sellers’ agent. Your agent should make sure the attorney’s office has all the information they require to process this closing such as contact information for your lender so they can get the pay-off amount from them and arrange final payment. If you are out of town, you can instruct the attorney to mail you the package for your signature. Around here, mail closings are quite common as many of our buyers and sellers live outside the area. If you want the proceeds from the closing directly wired to your bank, you must provide the attorney’s office with the wiring information prior to the closing. If you have any questions, make sure you ask your agent.
