Occasionally, we ask experts to address real estate issues of interest to our readers. Myrna Keplinger, principal of The Settlement Group in Burke, Va., answers a buyer’s question about what to expect during the closing.
I just found a great house in Leesburg that I plan to buy and I’m getting ready to go to closing at a settlement company to sign all of the papers. Can you please explain what I can expect at the closing and what I should bring with me?
Congratulations on buying your home! Signing all of the papers at a closing is a straightforward process if you do a bit of homework beforehand.
To start with, it’s good to understand what a title/settlement company does. In short, a settlement company brings everything and everyone together — the buyer and seller, real estate agents, lenders and the title agent/attorney and staff who will make sure all paperwork is done properly.
Closings are conducted by a licensed title settlement agent or an attorney. Your closing should last about 90 minutes. In Virginia, D.C. and Maryland, as the buyer, the choice of settlement company is yours. Your lender or real estate agent can help you find a settlement company or, in Virginia, for example, you can check with the Virginia Land Title Association to find a Virginia certified title settlement agent.
Before you go to closing, your settlement company will examine the title history and prepare a title insurance commitment for you and your lender. A title insurance policy, a critical tool for protecting your investment, will be offered to you for purchase by your settlement company at closing. Make sure a property survey has been done. It’s optional, but we highly recommend it to make sure there are no boundary disputes that you discover later.
Avoid surprises at the closing. Ask the settlement company for copies of any available documents you will have to sign at the closing so you can read them at your leisure. Most are pretty easy to understand. The document you’ll want to focus on most is the settlement statement, called a HUD-1. The HUD-1 outlines all of the charges to each party, including lender’s fees, escrows, insurance premiums, government recording charges, the survey, a termite inspection, title insurance, HOA/condo dues and the title company’s fees.
Make sure you understand all of the fees and other payments. If you have questions, call your agent or the settlement company ahead of time. No question is too small or insignificant. All of these people are working for you.
It’s important to know what to bring to the closing. Both buyer and seller need to bring valid picture identification, such as a driver’s license. You’d be surprised how often people forget their ID. We can’t sell you a house unless we know who you are! As the buyer, you will need to wire the funds to the settlement company or bring a certified or cashier’s check (made payable to your settlement company) for the total amount of your closing costs.
At the closing, after you review the HUD-1 and sign the documents, the seller will sign the deed, which transfers ownership of the property to you. Once the deed has been signed, then you can sign the lender documents, including the “note” (which outlines the conditions of your loan) and the “Deed of Trust” (pledging the property itself as collateral for the loan).
You’ll have to sign your name on a lot of papers at the closing. But if you get your questions answered ahead of time and bring what you need to the meeting, it’s pretty painless. Now go out and celebrate owning your new home!
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