Many home buyers stress about a real estate closing. However, the mere fact that there is a closing means that most of the hard work has already been done. The lender has approved a loan, assuming there is a loan. If there’s no loan and the purchase is all cash then the process is even more straight forward as there will be less documents to sign. The closing is the time for your attorney to shine or the notary to earn their money. Here’s what to expect.
As a buyer your job is to sign the documents that are presented in front of you. Expect a deluge of paperwork and your hand to ache. These will all relate to the sale of the home and the mortgage. Your attorney or the notary will explain what they all are as you sign them. Reading them all can be overwhelming and extremely time consuming. The documents are usually e-mailed to you prior to the closing to review anyway.
The Closing Disclosure (also known as the Settlement Sheet or HUD 1) should have been prepared by the title company a day or two before closing. It will give an itemized account of the closing costs and the money that the buyer has to bring to the closing. It will also show the amount of money being disbursed to the seller. Last minute items such as water and sewer bill pay off are often added on the day of the closing which can change the numbers slightly.
The property title is signed over from the seller to the buyer, transferring ownership. This is accomplished by the buyer and seller both signing the deed. It is not necessary for two parties to be in the room at the same time. The main documents will include:
- Property deed
- Bill of sale
- Transfer tax declaration
- Mortgage agreement and note
- Closing disclosure (this details all the financial details of the transaction)
Who will be there?
Those present at a closing in New York will usually be both the buyer and seller’s attorneys and the title agent representing the bank. Often a buyer and seller’s sales agent(s) will also be present or show up towards the end to collect their commission checks. Sometimes a closing can occur at a notary’s office or even at home if the buyer is unable to make it to an office. In these instances a notary will handle the closing, explaining what all the documents are. In these cases, it is unlikely anyone other than the buyer and the notary will be present.
- If there is a mortgage, the bank’s title agent would have issued a check either to your attorney’s escrow account or will present it directly at the closing table. If there is no mortgage, then the buyer is expected to bring a cashier’s check for the difference after the down payment.
- The seller will receive any proceeds earned from the sale once the existing liens have been paid.
- The sales agents will collect their commission checks
- The attorney’s fees will be paid
What happens at the end of a closing?
Usually the new owner is given their keys. Their attorney’s office will agree to e-mail over all the signed documents and/or mail a hard copy. The deed will be filed with the city by the buyer’s attorney, registering the sale and new ownership of the property.