When Should You Close?
Closings can sometimes occur within a few weeks. It takes time to arrange financing, conduct inspections, obtain appraisals, locate replacement housing, contact movers, pack and actually move.
While instant closings are not practical, neither are closings too far in the future. The problem with closings much past 60 days is that loan interest rates are difficult to lock in. If mortgage rates go up, it’s possible that the buyer will no longer be able to afford the home and thus the deal may not close.
The result of these considerations is that most homes close 30 to 45 days after a sale agreement has been signed.
What Happens during Closing?
Before closing, buyers typically have a final opportunity to walk through the property to ensure that it’s condition has not materially changed and any repairs have been completed since the sale agreement was signed.
Closing is usually a one hour meeting at the closing attorney’s office to sign the paperwork needed to complete the sale transaction. All necessary papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement and allows all parties in the transaction to verify their interests.
Closing is increasingly computerized and automated. If buyer and seller are present, they may be at the same table, or they may complete their papers separately.
Whatever the process, the outcome of the closing is the following:
• Property title is transferred from seller to buyer.
• The buyer receives the keys to the home.
• The seller receives payment for the home.
• From the amount credited to the seller, the closing agent subtracts money to pay existing mortgage and other transaction costs.
• Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices. Usually the closing agent also completes the paperwork needed to record the loan.
• Transfer taxes are paid and other claims settled (including closing costs, legal fees and adjustments).
The real estate attorney handles both the closing papers and related documents.