by Emily Hechler 
Congratulations! You found your perfect home! Now that the search is over, it’s time to prepare to close on your home. While closing day may still be a few weeks away, there are important steps that you need to take in the meantime. That way, you will be ready to move into your new home as soon as you get your keys. By staying on track in the weeks leading up to your closing day, you’ll make sure everything is in order.
When I bought my house last year, I wish I had a guide to help me know what to expect and to help me feel confident in the process. Here’s the guide I wish I had leading up to buying my house.
Set a Closing Date
Closing day is set during contract negotiations. Your real estate agent will include the desired closing date in the offer. This date is chosen based on how many steps there are to complete leading up to closing day, your real estate agent’s schedule, and your schedule. If the seller makes a counteroffer, they may propose a different closing date. Once agreed upon, mark it on your calendar and make sure you’re available. You must be present to sign the closing documents (mortgage documents cannot be signed digitally), so this is not a good time to go on vacation or be out of town for a work trip. So, if you need to, ask your real estate agent to change the date.
On average, it takes 43 days to close on a house. This timeline starts the day you go under contract and ends on closing day. Once you go under contract, the countdown starts to complete the necessary steps of the closing process.
Pay Earnest Money
Next, you will likely have to pay earnest money to the home seller. This money shows the seller that you are serious about your offer since you have money on the table, and if everything goes as planned, the earnest money will be applied toward your down payment or closing costs.
Get a Home Inspection
Your contract likely includes a home inspection. While you’ve walked through the house a few times, there may be underlying issues that you missed. A professional home inspector can identify any potential problems. They’ll examine key areas like the foundation, potential water damage, electrical systems, roof condition, and more. After they complete the inspection, the inspector will create a detailed report for you to keep. If issues appeared in the inspection that you didn’t notice before you made an offer, you can negotiate with the seller for a credit toward repairs or ask them to fix the problems before closing.
Tip: Check with your real estate agent if you are allowed to be on the property during the inspection. This is a great time to take photos of the house so you can document the condition. Take photos of the good, the bad, and everything in between. These will come in handy during your final walkthrough.
In the current post-COVID era, many sellers would rather give the seller a credit toward repairs over fixing the problems first. If there are too many issues that arise during the inspection, this could be your sign to not buy the house. You will likely lose your earnest money as a result, but you could be saving thousands of dollars in repairs.
Schedule as Appraisal
Next, your future home will need an appraisal. An appraiser will visit the house and walk through the property to make note of its condition. They will compare the house to others in the area to determine the value of the home. Most lenders require an appraisal to make sure they are not issuing you a home loan for more than what the house is worth.
Gather Your Loan Documents
Leading up to closing, you will also need to collect the necessary loan documents. If you were preapproved for a mortgage, you likely have a lot of this information on hand already. You will need your ID, income statements, asset statements, history of residence, loan application, closing disclosure, and certificate of occupancy. Finding all your documentation can take some time. Your real estate agent will give you a list of exactly what documents they need from you.
Shop for Home Insurance
In the meantime, you’ll need to arrange for home insurance, since proof of insurance is required to close on your house. Different insurance agencies offer varying coverage options and prices, so it’s important to shop around for the best deal. Many homeowners choose to escrow their home insurance payments, meaning your insurance cost is included in your monthly mortgage bill. To make the process easier, Alltru partners with TruStage Insurance which offers competitive rates, coverage, and service. Make sure you get a quote from TruStage to see how they can help you protect your new home.
Complete a Final Walkthrough
Just before your closing date, you will complete a final walkthrough of the house. This is your opportunity to make sure that nothing about the property has changed since last time you were at the house. The only exception is to make sure that all agreed-upon repairs have been completed. This is when you should pull out your photos to compare the home’s condition now to what it was a few weeks ago.
During your final walkthrough, check for any new damage and confirm that everything in the house is functioning properly. Test the lights, appliances, and any other features you plan to use to ensure they’re all in good working condition.
Contact Your Financial Institution
At this point, you will know exactly how much you will pay on closing day. Contact your financial institution ahead of time to ask how you will make your payment. You may have to wire the funds or use a cashier’s check. By contacting your financial institution ahead of time, you can help prevent any delays that may be caused by a large transaction.
Meet for the Closing
On closing day, meet the team at the agreed upon location. This is likely the title company’s office or a real estate agent’s office. Be ready to sign your name on several different documents. This includes a settlement statement, mortgage note, and more. In short, by signing all of these documents, you are ensuring that you are paying a specific amount for the sale of the home, that you will pay your loan payments, and that you are the new owner of the home.
Congrats, You Own a House!
Once you’ve signed all the necessary documents and paid your closing costs, the home is officially yours! Your real estate agent will give you the keys to your new house and from that moment you’re free to move in whenever you’re ready. Congratulations on becoming a homeowner!
Buying a home can be a complex process, but fortunately, your real estate agent is there to guide you every step of the way. If you have any questions during this process, your real estate agent is your go-to person. They can guide you in the right direction. When you are ready to buy your next home, start your journey with Alltru, we’re here to help make that dream a reality!
