But for a buyer, it’s important not to let the little things slide ahead of closing day. You’re also double-checking that the home is in the condition agreed upon in the contract. Avoid these buyer faux pas when offering on a house. Things That Need to be in Place Prior to Closing on a House The following are things that need to be in place prior to closing because the day of closing on a house belongs to the Buyer. Unless you are an all-cash buyer, it is a good idea to get pre-approved for a mortgage before you start searching for a home. Nothing more exciting than getting the keys to your new place! The best plan is to call the utility companies and get service set up well before closing. As part of the closing process, your mortgage lender will require a title search, and you'll need to purchase title insurance to protect you from legal claims to the house. If we had not seen the documents a day or two before, the errors would have delayed the closing by at least a day. Stick up for yourself. 1. Too bad those keys are about to become obsolete. Start interviewing general contractors now. Underwriters are like real estate detectives—it’s their job to make sure you've represented yourself and your finances truthfully, and that you haven’t made any false or misleading claims on your loan application. From changing the locks to turning on utilities, here's a list of things to do immediately after closing. Getting a Mortgage Loan: Pre-Approved, Then Not Approved When one client is pre-approved for a mortgage, and then not approved during escrow, real estate expert Tara-Nicholle Nelson has a few solutions up her sleeve. Do NOT Close Out Any Debt Account. As the years go by in a home, the list of tasks typically continues to grow but owning a home is a great investment and accomplishment! There are several mistakes you may make as a would-be homeowner that will derail a closing or drive your interest rate higher. Do these things first before you get settled in your new place. Your lender will keep a close eye on your finances right up until the deal closes. The underwriter—employed by your mortgage company—will check your credit score, review your home appraisal, and ensure that your financial portfolio has remained the same since you were pre-approved for the loan. Closing out a credit card, for example, can lower your credit score. Close All Valves, and Turn Off All Switches. You’ve finished negotiations and accepted an offer from a buyer. Closing disclosure: This multi-page behemoth replaces the old HUD-1 form. Prior to closing, the seller will need to complete any repairs they agreed to make to the house and prove that the title is free and clear of defects. Tick these things to do before closing on a house off your to-do list, and your move-in might prove a (more) seamless affair. Nobody else cares as much about the closing as you do, and you may have to live with their mistakes for decades. 17 things to know about closing your house deal Closing day in a house deal is a milestone for both the seller and the buyer. You can get recommendations from your real estate agent, mortgage lender, and friends—just be sure to check out the license and reputation of each company online. Once you have that closing date in hand, nail down movers ASAP. That includes making a down payment on a car, boat, or similar large purchase that has to be financed. During this stage, you're making sure the previous owner has vacated (unless you’ve allowed a rent-back arrangement in which they can stick around for a period of time before moving). Make sure you cross off the following tasks from your to-do list: Tackle Your Remaining Home Repairs. This official document outlines your exact mortgage payments, the loan’s terms (e.g., the interest rate and duration), and additional fees you’ll pay, called closing costs (which account for anywhere from 2% to 7% of your home’s price). The closing occurs between four and six weeks after you’ve signed a purchase and sale agreement on one magical day. Three Things Buyers Need to Do Before Closing on a House. But for a buyer, it’s important not to let the little things slide ahead of closing day. Periodic snow shoveling? Anything that was promised to you in the purchase agreement no longer applies after the settlement is complete. These are the most common contingencies that are part of your new home closing process: When you buy a home, you “take title” to the property and establish legal ownership—a process that’s confirmed by local public land records. For the best experience, please enable cookies when using our site. Click Follow Search to get alerts on new listings. 4 Hardwood Flooring Trends You Should Know About, Have You Served? Tick these things to do before closing on a house off your to-do list, and your move-in might prove a (more) seamless affair. You definitely don’t want to find yourself bereft of help on moving day itself, begging that friend with a pickup truck to bail you out. Turn off shut-off valves to sinks, toilets, dishwashers, the water heater, refrigerator and washing machine. ©1995-2020 National Association of REALTORS® and Move, Inc. All rights reserved.realtor.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc., a subsidiary of News Corp. Daniel Bortz has written for the New York Times, Washington Post, Money magazine, Consumer Reports, Entrepreneur magazine, and more. Do not increase the credit limits on your cards. The above 13 tasks are all very important and will improve the overall home buying experience. Sometimes distant relatives—or an ex-spouse—may surface with a claim that they actually own the home, and that the seller had no right to sell it to you in the first place. Before you close on your mortgage, it’s critical to avoid taking steps with your finances that could derail the closing process. With the buyer’s permission, turn off your house’s main shutoff valve 24 hours before closing. 1. Book the movers. If you’re changing addresses during a busy moving month (e.g., June or September), the choice companies tend to book up quickly; if you’re planning on doing the transport yourself, you still need to book a rental truck and any additional equipment. Contingencies may include: Home inspection : To protect yourself from a bad deal, hire a home inspector to make sure there aren’t any hidden faults that could cost you big bucks after your seller is long gone. If the previous owners already had a security system and you want to continue the service, you’ll still need to call the company and have the account switched over — and you’ll probably have to spring for new sensors, motion detectors, and a keypad. Things like applying for a loan, scheduling a home inspection, and purchasing homeowner’s insurance, just to name a few. Closing contingencies are conditions listed in the contract that must be met before the home transaction becomes legally binding. Maybe you’re not doing any major work on the place, but it’s still likely you’re repainting walls and buffing a few floors. When you’re done, you’ll collect the keys, and you're finally home free! By law, you are entitled to get this form three days before your closing meeting and should be in the same format as the Loan Estimate you got after applying for your mortgage. If they haven’t received cancellation notice from the seller, let the seller know to take care of that. Here are 8 things to do before closing on a house: Get your New Mortgage Ready. Don’t get cajoled or intimidated. What are the steps to closing on a house? Closing day is not something to take lightly. You've made that down payment, but before you can go to the closing table, your home loan must go through the underwriting process. Book the locksmith as close to your move-in date as possible so it’s one less thing you’re stressing about the first night in your new place. Make sure you have the following items when you head to the closing table: Plan to sign a ton of paperwork. Do a final walk-through Most sales contracts allow buyers to do a walk-through of the home within 24 hours before closing. He is also a Realtor in Virginia. Here’s a checklist if you are SELLING: 1. Attend the Walk-Through As a homebuyer, you have a right to inspect the property one more time before closing. Drive through your pending new neighborhood and collect menus for pizza, Chinese, and any other delicious-looking takeout spots (online menus are frequently incomplete and outdated). But clearing title will ensure this doesn’t happen, says Marc Israel, president and chief counsel of MiT National Land Services, a title company in New York City. No matter how trustworthy the previous owners may seem, you certainly don’t want them holding on to some spare master key that can access your new home. As the seller, your biggest priority during the week before closing is to get the home ready for the new owner. There are a number of things you need to do before you close on a home. Let’s be honest: The home-buying process is an enormous time-suck. And if it’s a quick and painless closing, you’ll be glad your phone is powered up to snap a triumphant “Got the keys!” pic for Instagram. Leave the kids with a babysitter (ideally, tack on a day or two for the actual move as well) and find a friend or relative who can watch the pets for a few days so they’re not frazzled by an empty apartment and the chaos of the transition. To make it go smoothly, it is very important that both buyer and the seller are properly prepared. For every story about a quick and painless experience, there are the tales of undiscovered liens and lawsuits, never mind regretful, histrionic sellers. 3. Start sleuthing online about various burglary/security systems, keeping in mind that some systems are better suited to condo life than to single-family-home living. This site is protected by reCAPTCHA and the, Sorry, we were unable to share this article. Change the locks. Get references from friends, make your calls, look up previous work online, and if possible, try to get general time and money estimates based on the photos and dimensions of your future home. If the kids and pets can arrive at a somewhat unpacked new place with their new sleeping areas already set up, so much the better. An attorney or settlement agent will guide you through the process. If you spot any discrepancies, ask your lender to explain them. Congratulations! Here are the four things you need to know as a buyer before closing on a house: #1. Assume that everyone has a set of keys to your new home. Also, don’t let other bank accounts fall behind. Assuming you can pay for new furniture in full immediately, one well-priced couch shouldn’t put your mortgage at risk, but resist buying a five-figure living room set until after closing. It looks like Cookies are disabled in your browser. The closing agent or your real estate agent can give you a copy of the closing statement, known as the HUD-1, detailing how much you owe at the closing table. Book those workers several weeks in advance, ideally for a time after you close but before you move, so that you’re not in permanent purgatory in your new place. You’ll want to compare your closing disclosure to the loan estimate your lender gave you at the outset. Leave a note for the buyers so they won't call a plumber. Make Sure Your Mortgage Is Approved. 2) DO NOT use credit cards excessively or let current accounts fall behind. Most sales contracts allow buyers to do a walk-through of the home within 24 hours before closing. It itemizes the buyer’s and seller’s closing costs separately. Most purchase agreements have contingencies—things that buyers must do before the real estate transaction is official, explains Jimmy Branham, a Coral Springs, FL, real estate agent at the Keyes Company. Do you hire out for a monthly housecleaning? Your closing meeting will take place at the office of a neutral third party. The process of buying a home is long and complicated, with multiple steps to be accomplished before an actual closing can occur. All of them were fixed the morning before closing. Keep this closing process list handy to know you've done what you need to in order to close the deal. If you’re changing addresses during a busy moving month (e.g., June or September), the choice companies tend to book … You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. Before closing, do not spend an additional amount of money on other things. (If the security serviceperson is nice, he might leave you all of the old stuff, just because.). Home Buyers Reveal: 'What I Wish I Had Known Before Buying My First Home', Selling Your Home? Do not close any credit accounts. If you're getting a loan, one of the best ways to prepare is to thoroughly review your closing disclosure, also known as a HUD-1 settlement statement. This one comes with a HUGE caveat: Generally speaking, you should institute a spending freeze during the escrow period. You may have been pre-approved for a mortgage already, but that’s not quite the same as being actually approved. Good GCs are the unicorns of the home-repair world; don’t spend months after move-in trying to find that single reliable contractor. https://www.maxrealestateexposure.com/closing-checklist-home-sellers To make the process easier to understand, here is a list of nine things you’ll need to do before closing on your new home. Being a homeowner is an amazing feeling and as you can see, there are things to do, even after closing. Closing day in a house deal is a milestone for both the seller and the buyer. The last thing you want is for your go-to home maintenance lifesavers to show up at your old place only to find that you’ve flown the coop, wasting their precious work hours in the process. Step #6: Lock up. It’s a lot easier to paint the walls and redo the floors when there’s no furniture in there to begin with. However, as we mentioned earlier about keeping your debt as is until the mortgage closes, the same applies here. The day before closing shouldn’t be a very stressful time, and working with a top agent will do wonders for your confidence come closing day. What Not To Do Before Closing on A House Change jobs, quit your job, or become self-employed Buy a car, truck or van unless you plan on living in it Use your credit cards excessively or let your payment fall behind Has to be financed also, don ’ t want to deal with closing... This checklist of things to do a walk-through of the home-repair world ; don ’ t let other bank fall! 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