The Closing

Many buyers have heard nightmare stories of closings -- stories of nasty arguments, delayed closings, or even closings that fell apart. Occasionally, difficulties do emerge at closings: we discover that the seller did not complete inspection repairs they had agreed to address, that there is an easement on the property that the buyer had not known about, or that not all the lender's requirements have been satisfied by the buyer. There are a myriad of details that need to get pulled together at the closing, so problems can emerge even when everyone is doing a good job. Generally, however, if a good faith effort has been made by competent agents, loan officers, and title officers to pull everything together -- and if they have disclosed all problems to the buyer and seller -- the closing will tend to be a pleasantly boring event. The seller signs the deed, several financial statements and a couple of disclosures. The buyer signs a similar number of documents -- and then a three inch stack of documents and disclosures from the lender. Forty-five minutes later, the title company's closer leaves to make copies of the closing documents while the buyer and seller exchange keys and pleasantries. It's done. It is a simple procedure. In some respects, it's sometimes even a bit of a letdown after the intensity of other phases of the purchase process. But as anyone who has been through a difficult closing will tell you, this is one event where "boring" is what we're hoping for.

In most states, the closing is often held at the offices of the Title Company. For a week or so prior to closing, the title company will have worked with the lender and the agents involved -- or directly with the buyer and seller -- to make sure that the documents are properly prepared and that all the proper charges and credits on the buyer's and seller's financial statements are correct. As closing, the title company's "closer" will conduct the closing ceremony, explaining documents to the buyer and seller and making sure that everything is properly signed. The agents or attorneys involved will also review -- and provide supplementary explanations -- of critical documents. One of the closer's jobs is to move the closing along, since closings may be scheduled every hour. You will typically notice some tension between the closer's responsibility to explain documents and to move the process along. Stay focused on the task, but don't forget that this is a big deal. If you have questions or concerns, raise them. Mistakes are sometimes made. Again, you will probably have little latitude to change anything in the closing documents, but you should understand what you are signing. As indicated in the previous section, reviewing important documents prior to closing can be a big help.

You should check with your loan officer and your agent several days prior to closing on your property to make sure that you have everything you need at closing. In some cases, there may be a letter or receipt that you need to bring. Generally, however, you will only need to bring three things to the closing:

• Real Money: You need to bring "good funds" to closing. That means you either need cash (not recommended), money that was wired to the title company, or a certified bank or cashiers check. If you bring a personal check, or if the wired funds have not arrived, you won't close. As noted in the previous section, you should have received a precise statement of how much you need to bring to closing a day or two before the closing occurs. If not, you need to get the best estimate you can get from your lender or from the title company. Then wire funds or bring a cashier's check for at least a few hundred more. The title company can write you a check for the difference at closing. In fact, it is rarely a bad idea to have the check made out for $200-$300 more than you think you'll need, in case someone discovers a charge that was missed. It is also a good idea to bring a checkbook with you. If you are bringing a cashiers check to closing, it is best to have it made out to you rather than to the title company. You can then sign it over to the title company at closing.

• Photo ID: The title company will require some type of photo ID to verify that you are who you say you are. Most people use their driver's license. Again, if you don't have an acceptable photo ID, you won't close.

• Homeowner's Insurance: If you haven't already provided the title company with proof that you have the property insured, they will require that you bring documentation from your insurance company to the closing.

You should also try to get several pieces of information from the seller:

• If you don't know where the mailbox is, what the combination is to the key pad on the garage door, or where to put your trash out, now is the time to ask.

• If you haven't already, you might initiate a discussion about the neighbors. It can be useful to know if there is a local neighborhood expert on gardening or a teenager who loves to baby sit.

• Try to get the seller's new phone number and ask if you can call with questions. This can be a lifesaver if you discover a quirk in the way something works once you've moved in.

• Verify that the seller has called the utility companies to terminate their service. If they haven't, you may have troubles getting things transferred into your name.

Above all, keep your cool, your focus, and your positive attitude at the closing table. While the closing is typically a rather boring process, minor glitches can arise that look like disasters to both the buyer and seller at this juncture. Generally, they are glitches that the professionals involved have dealt with dozens of times before. If everyone keeps a cool head, most problems can be dealt with easily and expeditiously. When things go wrong, the closing may take an hour or two hours longer than normal -- while you wait for a key document to be corrected or for verification that the furnace servicing was completed. Stay cool. When you watching your kids on the swing in the backyard five years later, you probably won't be thinking about the glitch at the closing table.