Whether you close in escrow or in person, the key to settlement is preparation. By addressing the details during the weeks before closing, you have time to resolve any last minute glitches calmly.
- Insurance You need to obtain and present proof of a home owner’s policy from your insurance company. Your insurance agent will have a standardized form for this purpose. Arrange for proof of insurance no later than 3 weeks before the expected closing date. This insurance policy should list your lender as also insured. Check with your loan officer ahead of time to learn the complete legal name to be used in this reference. Your insurance agent will need the name and phone number of your lender and will want to know the location of the nearest fire hydrant, the type of construction of the home, and price.
- Utilities Your goal is to have service provided in your name beginning as close to the date of the closing as possible. The utility companies may shut service off if the builder’s name is removed from the account without yours taking its place. Make no assumptions about the availability of telephone service and do not rely on the experience of your new neighbors. Workloads change and lead times fluctuate. Call early to avoid inconvenience. Cable TV may not be available until a predetermined number of homes are occupied in a new area.
- Unresolved Issues Your builder and lender may attend the closing but are not required to do so. Closing agents are not authorized to negotiate or make representations on behalf of any party involved in the closing. If any issues remain unresolved, you are not ready to close. Finalize all agreements before closing.
- Lender Conditions or Contingencies Your loan approval may have included one or more contingencies. You must satisfy all loan conditions in order to close. For example, if closing the sale on a previous residence was a condition of loan approval, you need copies of those closing documents to close on your new home.
- The Final Number The amount of money you must bring to closing includes items such as property tax and interest on your new loan. These items are subject to proration and change depending on the exact date of closing. Therefore the closing agent cannot calculate the total until the closing date is set. A federal law, the Real Estate Settlement Procedures Act (RESPA) provides you with the right to see the final figures 24 hours before closing. Just ask for them.
- Form of Payment Depending on the requirements of your lender, you may need to bring cash or certified funds to closing. Allow time to obtain these funds. Remember that banks sometimes place a hold on funds moving to your account from another source. Check with your closing agent regarding how to make out the check. You can usually cover minor, lastminute adjustments in costs with your personal check.