The Real Estate Closing - A Short Course for Home Buyers

Real estate closings are what folklore is all about.

You have probably heard stories, both good and bad, about the real estate closing (or "settlement"). You have probably heard about the closing that lasted for days, or the one that blew up over something as trivial as a doorknob.

Or perhaps you have heard stories of closings where the sellers are getting a divorce and could not even sit in the room together.

Though it can be fun to hear these stories, keep in mind they are usually 10% fact and 90% fiction. Sure, it's true that not all closings go smoothly. But in reality the overwhelming majority of closings go quite smoothly.

Keep in mind that everyone present at the real estate closing is there for the same reason. They want to complete the transaction so you can buy your new home, or sell your existing home. Despite what you may wonder at times, it's highly unlikely that anyone at the closing has ulterior motives.

At closing, you can expect a substantial number of documents will be signed by the home buyers. Mortgage documentation varies from lender to lender, though they all basically contain the same general documents including the mortgage, the note, HUD Settlement Statement, and a variety of other documents that are signed to protect your interests and the bank's interests.

There will be a title insurance report and policy at the closing, which is further assurance that no one has a claim to the home you are about to buy. The title insurance offers important protection for the home buyers and their lender. Every lender will require title insurance, though the specifics of the policy and the searches will differ from state to state.

Bring photo identification to your real estate closing, and make sure you have a checkbook with plenty of checks. Though you may not have to write one check, there is the possibility that you may have to write several. Last minute adjustments may require you to rewrite those same batch of checks again.

Also during the closing, you will confirm that the mortgage application you filled out contains accurate information, and that your circumstances have not substantially changed since you completed the application (e.g. you changed jobs, etc). Keep in mind, it's always better to advise your mortgage lender about changes in your circumstances before the day of closing.

You should feel comfortable asking questions at closing. Also, take your time to read each document before signing it. Sometimes, you can request that the lender let you come to the closing early to review documents (so the rest of the people in the transaction are not waiting for you to do so).

Remember, as the home buyer you control the closing. Do it at your pace, and only sign when you are comfortable signing the documents. Ask your questions, and remember that everyone in the room wants to see the loan close. Work as a team, and you will be impressed with how smooth the transaction will go.

* Copyright 2006, Brandon Cornett. You may republish this article if you keep the byline and author's note, and also leave the hyperlinks active.

About the Author

You can learn more about the real estate closing by visiting HomeBuyingInstitute.com, the Internet's largest library of home buying advice. Online at: http://www.homebuyinginstitute.com

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