Closing Day: What to Expect When Buying Your First Home

Closing day is the end of the road for buyers. There is a lot to consider, and the closing process can seem overwhelming! With the right real estate agent to guide you, the process does not need to be as stressful as it may seem.

Today’s real estate market is highly competitive with ever-evolving trends, but being prepared can give you an edge. Here’s what you need to know about closing day as 2024 exits stage left.

When Does Closing Day Happen?

Typically, closing day will happen four to six weeks after the purchase agreement and sale agreement have been signed. During this period of time, your funds will be held in escrow until the contingencies are met. These contingencies include:

• The Home Inspection: This makes sure there’s no defects or major repairs needed with the home.
• The Appraisal: This will match the property’s estimated rate to the amount of the mortgage loan.

With increasing interest rates and low inventories, buyers should try to adapt to the market and keep up with all the necessary paperwork and deadlines to have a snag-free closing day.

How Do I Prepare for the Final Walk Through?

Many buyers will be given the chance to have a final walk through of the home within 24 hours of the settlement. During this timeframe, here are a few things you should know to look out for:

• Property Repairs: If there were any repairs that were agreed upon, this is the time to check if they are completed.
• Appliances and Other Systems: Check to see if appliances are in working order, as well as plumbing, HVAC systems, and that all electrical outlets function.
• Current Condition: This is also the time to make sure there’s been no damage made to the house since your last visit, or made while the seller moved out.

With the closing process, the final walk through is your chance to tie up any loose ends, so you may want to have a checklist on hand, your smartphone’s camera, and your Realtor to see if anything is missing or incomplete. If anything is wrong, your agent can walk you through the steps to fixing it or finding a solution.

What Happens After the Final Walk Through?

If the final walk through went smoothly, the next step is to receive the closing disclosure from your mortgage lender. According to the TRID (TILA-RESPA Integrated Disclosure) rule, you’ll get this document no more than three days prior to the settlement. As a buyer, you are entitled to a three-day review period where you’ll be able to address any issues with your closing disclosure and review any fees.

About Interest Rates: Interest rates can change quickly, so pay close attention to the loan’s specific terms. If there’s been significant changes since your pre-approval, ask your Realtor about potentially lowering the mortgage rate (buying points), or other options to get the best deal. 

On Closing Day

This is the day–now what happens? Usually, your Realtor, lender, and title company representative will meet in person to settle the deal. It’s essential the following:

1. Signing the Documents: This might be when you wished you had a stamp of your signature, but you’ll be signing quite a bit here, including vital documents such as the mortgage promissory note, deed of trust (securing the loan with the home as collateral), and closing disclosure.
2. Funds Transfer: The lender will then release the loan funds to the seller.
3. Transfer of Title: The property ownership now officially transfers to you.

When these documents are verified and signed, it’s the moment you’ve been waiting for–you’re given the keys to your new home!

Be Prepared With a Real Estate Pro

Closing day may seem complex, but it doesn’t have to be. It’s simply a series of steps, from the final walk through to going over your Closing Disclosure–but through each of these steps, your real estate agent can guide you and double-check all the fine details.

Contact Linda Moore today if you’re looking to become a new homeowner and want someone with over 34 years of experience to help you find your dream home in Coastal North San Diego.