Closing on a home-sale contract is a suspense-filled drama, especially if
you're a first-time homebuyer. First, you get stage fright as you drive white-
knuckled to the attorney's office, wondering what might go wrong at the last
minute. Then you get writer's cramp as you sign bunches of confusing
documents. Butterflies really start to swarm in your stomach for the
tension-filled climax--final payment. The number is so big you've run out of
room on the check.
Actually, settlement day is not so nerve-wracking if you arm yourself with the
right information beforehand. You can stride confidently to the closing
table, knowing that you've done your homework, and that your settlement
attorney and lender are on your side.
Your first step is to find a qualified settlement attorney or company to
represent you. If you use an attorney, make sure he or she handles
residential real estate closings on a frequent basis. Get referrals from your
personal or business lawyer, from your real estate agent, or friends or
associates. Interview the recommended person or company and ask them how much
experience they have.
Your next step is to familiarize yourself with that long-winded document, the
HUD-1 Disclosure/Settlement Form. Take your time going over the numbers. You
should have already received an estimate of closing costs, including
settlement fee, title search, title insurance, document preparation, etc. If
you're smart, you've already discussed those figures with your loan officer
and settlement attorney. Compare that estimate carefully with the final
numbers on the HUD-1 form for any discrepancies or higher costs. The numbers
could be lower or higher for legitimate reasons but it's in your interest to
double-check and ask questions at settlement. Prior to settlement day, make
sure you've gone over the loan agreement, including points, down payment and
other fees due on the loan at closing.
Take a good look at the sales contract, too, and familiarize yourself with the
terms before you go to closing. Is the seller paying any of the loan points
or settlement costs? Are all items included that are supposed to convey with
the home, such as appliances, window treatments or chandeliers? Right before
closing, you'll have the opportunity for a "walk-through" of the home to check
on those items, and to make sure that everything is in good working order and
that any required repairs have been made. Immediately notify your settlement
agent of any discrepancies.
For settlement day, you'll need to bring your checkbook, plus a certified
check or cashier's check for the balance of the down payment and estimated
closing costs, your driver's license, and a copy of your home insurance
Sources used to create this article include writer Michele Lerner and The
Washington Times newspaper.