Buyer’s Timeline: From contract signing to closing.
1. Shop lenders for interest rates, get loan estimates or “work-sheets” from each that show rates, fees, payment, etc.
2. Collect documents: Bank statement, tax returns, W-2s, Paystubs, etc – get the list of what’s needed from any lender.
*The ACCURACY AND SPEED of your responses to requests for info/documentation ARE THE KEY TO ENSURING AN ON-TIME CLOSING. If you are not accurate or speedy in your responses, you can cause your closing date to be missed/postponed. This can cause extensive complications and added EXPENSE to you and to the sellers; moving companies, childcare, days-off work, travel plans, and much more all come into play.
*Be prepared to be asked for info/docs. early, often, redundantly, inconveniently, seemingly unimportantly, and even at the last minute!! REGARDLESS OF THE LENDER. Respond in hours not days. Ex: Go home during lunch to get the document. Stay up late. Re-send. Don’t complain. Make the call now. Do what ever is necessary to get EXACTLY and THOROUGHLY what is being asked for…to the lender or title company ASAP.
3. Choose a lender and complete a loan application with a loan officer for a pre-approval.
4. Choose a Real Estate Professional; Find a home; Make an offer, negotiate price, then sign a contract to buy that home.
5. Get the contract to your lender; Have your lender lock in your interest rate.
6. The lender’s underwriter (the one who reviews all documents to compare them against the requirements for your loan type) will request supporting info/documents, and the loan officer will convey these requests to you, as they occur.
7. Order home inspection and termite report: Respond to the results. – Negotiate repairs or lowered price with the buyer. If you have NOT fixed everything before listing it, THIS is the event that will cause you the most trouble. (Items to be repaired cause buyers caution, concern and worry and can cause buyers use these reasons to cancel their contract with you.)
8. Notify the title company ASAP of any marital status changes that you expect PRIOR to closing.
9. Notify the title company ASAP if you HAVE gotten married or divorced since you bought the property.
10. Await the buyer’s final approval of their loan. 2-6 weeks after contract signing. Faster if you got pre-approved by their lender before signing the contract to buy your home.
11. Schedule/attend the closing – Your lender or Real Estate Professionals will call you to schedule the closing.
12. Location of closing: Usually in the office of either the lender, the Real Estate Professionals or the title company.
13. Length of closing: Closings usually take about 40 minutes, and you will sign from 50-75 times, depending upon the lender.
Below are closing FAQ:
1. What is a closing? It is the 30-60 minute meeting of buyers, sellers, real estate professionals and loan officer, led by the title company’s “closer”. In this meeting, document explanation/signing takes place to make the transaction official and finalized…or “closed”.
The title company collects all monies form the buyer and the buyer’s lender at closing. Then, out of those funds, the title company pays all the other 3rd parties who helped make the transaction possible (Lender, real estate professionals, appraiser, home owners insurance company, tax authorities, etc.); the title company also pays off all the sellers’ liens, and then gives what’s left over (the “sellers proceeds”) to the seller. The buyer walks out as a new homeowner with keys, and the sellers leave to go to the closing of their new home with the sales-proceeds check they just received.
2. Location of closing? Usually in the office of either the lender, the Real Estate Professionals or the title company.
3. How long does a closing last? Ours last an average of 40 minutes – they range from 30-60 minutes. Sellers only sign about 14 documents. Buyers sign from 50-70 times, depending on the lender and loan type.
4. What documents do buyers sign?
About: They are regulated by state and/or federal governments. You cannot make any changes to them and you have to sign them exactly as they are. There are only 6 things that differ from your loan and everyone else’s loans in Kentucky: Names, dates, dollar amounts, interest rates, property address and the length of your loan. That’s it. Everything else is boiler plate and identical all across Kentucky. On conforming loans, the type most borrowers choose, 98% of the docs are the same all across the U.S. In these documents you are usually either a) agreeing to something; b) swearing that something is true, or c) acknowledging receipt of the document and/or that you understand the document. The lender has to have you sign many of these documents in order to be able to go after you in the event you have (or will) commit fraud that causes then a financial loss.
a. Closing Disclosure and Settlement Statement – These summarize the transaction – show who’s paying what and who’s receiving what. The key to the transaction and usually reviewed first.
b. Title company’s few documents.
c. Promissory Note – says you promise to pay the lender back the amount that you’re borrowing – shows interest rate, 1st and last payment dates.
d. Mortgage – Says if you don’t pay, you don’t stay – gives the lender the right to repossess your house if you default on your loan.
e. The rest of the documents.
5. Do buyers and sellers need to arrive at the closing at the same time? Yes. Sellers AND buyers need to arrive at the start of closing. In days gone by, sellers would not show up until later – however, this now only complicates and delays the closings.
6. What if you can’t attend the closing?
If you need to come earlier or later to sign your part, usually that’s not a problem, but you must call to arrange it.
If you will be out of town, or if a buyer is unable due to health/other, call the title co. ASAP to arrange someone to sign for you using our special/specific/limited power of attorney (POA) – cheapest and easiest solution, for about $100; OR we can arrange a mobile notary closer to come to you at the time and location of your convenience, anywhere in the U.S. for about $175 – requires several days’ advance notice.
7. What to bring to closing?
a. Your unexpired, government-issued photo-IDs. 1 form of ID, per person, is all we need.
b. Your legal spouse – even if he/she is not going to be on the deed or the loan. State law forces spouses to sign a few disclosures for their protection. See this link for Spousal Rights – Who has to attend closing.
c. Your funds needed to close: A cashier’s check payable to Jett Title OR you may electronically wire the funds to us – Call Jett Title for our wire instructions, then take these instructions to your bank in person…and wire funds the day BEFORE closing. Wired funds must show in the title company’s account before a closing is permitted to take place.
8. What about extra funds you may bring to closing? We give you a check back at the closing table for any excess funds you may bring.
Ex: You may bring the full proceeds check you got earlier that same day from the sale of your prior home…and that check may total more than you need for our closing with you.
Ex: You may bring a cashier’s check for an over-estimated amount.
No problem. Please let us know in advance if you know the amount you’ll be bringing to our closing, so we can already have your refund check ready for you when you arrive at our closing.
9. What is a settlement agent, title company, real estate attorney? A title company, real estate attorney, closing company, etc. = are all terms frequently used interchangeably to describe “settlement agents”. Title companies are either owned by, or employ real estate attorneys – Jett Title does both. All settlement agents perform the exact same legal function – they finalize, “close”, real estate transactions.
A settlement agent is the third party who makes everyone at the closing table happy (sellers are the 1st party, buyers are the 2nd party; everyone else in the transaction are 3rd parties): The buyers want a deed & keys to a house; the sellers want a check; and all the other third parties who helped make the transaction possible (real estate professionals, appraiser, lender, title, etc.) need to be paid for their services; the lender needs their documents signed in the right spots, by the right people in the right ways; money needs to change hands; the sellers’ liens/mortgages need to get paid off; the buyers’ new deed and mortgage need to be recorded at the county clerks’ office after the closing to make them official record…and many of other tasks need to be completed to legally finalize the real estate transaction.