Closing a home sale is when the transaction is completed. The transaction is completed when all documents are signed and payments made. It is usually an exciting and stressful time for both the buyer and the seller due to the large amount of money being exchanged. If the remainder of the property purchase procedure has been carried out correctly, however, closing the sale should not give you any nasty surprises. The key to a successful closure lies in preparation. The details of the transaction should be established at least a few days, if not weeks, before the actual closing date. This means that the search for the title has been completed, the bank has made a commitment to finance the purchase, and all other conditions for the purchase have been met.
Steps
Step 1. Make an appointment to visit the property one last time
Before concluding the purchase of a home, it is a good idea to take one last look at the property. If you're ready to close your purchase, you've probably visited the house several times, and had a thorough inspection done. The purpose of a last visit is not to identify problems inside the house (which should have been done much earlier), but rather to make sure that the seller has fulfilled his commitments by carrying out the repairs specified in the contract, and left the electrical households that it was agreed he would leave.
Step 2. To make an appointment, ask your real estate agent to arrange with the seller's agent
If you notice anything unusual, your agent should immediately notify the seller's agent to resolve the matter.
Ask last-minute questions. While you can certainly ask questions about closing the contract, if you have any outstanding issues you should try to clarify them well before the closing time
Step 3. Find out about the mortgage at your bank, about property matters from the notary, and ask about the contract from your real estate agent
- Remember that closing is the conclusion of the contract, the moment you sign the documents and deliver the checks, which is why it is advisable that the details of the sale of the house are established before the closing date.
- It may happen that you have a problem that takes some time to investigate, that requires documents to be reviewed, or that it takes time for repairs inside the property. Each of these issues can mean that the act of closing the contract can no longer occur on the appointed day, so make sure you have answered all your questions well in advance of the closing date.
Step 4. Take out home insurance
As a condition for granting the loan, virtually all financial institutions require you to take out home insurance.
The home insurance policy will cover both the buyer and the bank
Step 5. You can choose any insurance company in line with the instructions given by your bank, subscribe the policy and have the documentation sent
You'll need them when the sale closes, so make sure you get them well in advance.
Take out title insurance. Some banks make the granting of the loan conditional on the purchaser taking out title insurance. Title insurance is a relatively simple type of insurance that protects the buyer and the mortgage lender in case of problems that arise on the property after the sale
Step 6. Usually the buyer and the bank will have separate policies at the expense of the buyer
Step 7. As in the case of property insurance, you will need to provide the necessary documentation, which certifies the coverage of the insurance at the time of closing, then obtain it in advance of the time of closing
Step 8. Take care of the passage of utilities
Before the day of the closing of the contract, the buyer should take care of the passage of the utilities and put them in his own name.
- Contact the private user companies and do what is requested.
- This step is often mandatory in order to properly close the contract, but it is also a good idea since it allows the house to be ready to be inhabited.
- Complete the loan transfer agreement. Make an appointment with your bank before the closing date, and make sure all necessary documents are complete and the mortgage is confirmed.
Step 9. If your bank places conditions for mortgage approval, such as having your previous home sold, you will need to meet these requests - usually with the necessary documentation - by the closing date
Make sure the funds to cover the cost of closing the contract are available. Since the closing cost is calculated at the exact moment of the conclusion of the contract, you will not be able to know the final amount that you will have to pay on the date of the appointment for the closing of the sale
Step 10. Your bank will certainly have provided you with an estimate of the cost of closing the contract, which you can use as a reference, although the amount may be subject to fluctuations
In general, closing costs are approximately 3% to 5% of the total mortgage.
- You should make sure that you have the necessary funds available in your account for the day of the sale. Most banks hold checks deposited in an account before making them available, so make sure deposit crediting procedures are completed before the closing date.
- By the time the sale closes, you will likely need cashier's checks for payments that need to be incurred. Your real estate agent will let you know the exact amount of the checks.
Step 11. Any small costs that may arise at the last moment can usually be handled with a personal check
Advice
- Read in full all the documents your bank has provided you, as well as those given to you by the real estate agent and notary. Make sure that the contract you are about to sign is the same one that was proposed to you previously. If any of the information seems out of place, ask the competent person for an explanation. Buying a home involves a large financial commitment, so make sure you understand what you are doing.
- Try to keep extra funds available in your account, in case the requested amount is higher than expected.
