Buying a home doesn’t have to be stressful. The process is straightforward, once you understand it. Here’s a step-by-step guide. Once you have a ratified contract:
1. Select a Settlement/Title Company and Set up a Closing Date:
Start the settlement process immediately by placing your order with your agent. Most contracts require you to contact a settlement agent (or Title Company) within ten (10) days of signing the contract. Most contracts also specify a settlement date by which you must close. It is important that you meet both deadlines.
2. Provide Your Personal Information
Full Legal Name(s)/Social Security Number(s)
Tell us how you want your name to appear on your deed. All papers will be prepared using this name, so please provide us with your full legal name.
This is the manner in which you hold title to the property; you can choose from the following options:
- One Owner (no option): Sole Tenant
- Two Owners or more:
- Tenants in Common – each person has a severable interest in the property (if you die, your will determines who gets your share).
- Joint Tenants with Right of Survivorship (JTWROS) – in the event one person dies, the property automatically passes to the surviving tenant.
- Tenants by the Entirety – same as JTWROS but only available to married couples.
In some states, if you are married and your spouse’s name is not on the deed, he/she will still have to sign the deed waiving his/her “dower” rights (marital property rights). Therefore, your spouse will either have to attend the closing, sign the deed in advance or use a power of attorney document to allow you or someone else to sign on your spouse’s behalf. This document has to be specially prepared (we can prepare it), witnessed by a notary and the original presented at settlement for recording.
Many aspects of this process are time sensitive – please keep everyone informed of your whereabouts, so you can be contacted easily. If you are going to be out of town, please let everyone know.
Most lenders require a survey (except for condominiums). Please check with your lender.
Homeowners’s Insurance Policy
Most lenders also require you to buy a homeowners’ insurance policy (for fire, theft, etc.). Check with your lender. You may need to bring the policy and a receipt showing proof of payment to the closing.
Title Search/Title Insurance
We will order a “title search” of the property, check the property taxes and ensure that you will have a clear and marketable title so that we can issue you and your lender a title insurance policy.
3. Comply with the Contract/Work with your Realtor:
After you have placed your title order with us, you should concentrate on working with your realtor to ensure that you are in compliance with the terms of your contract. For example, you will need to schedule and/or complete:
- home inspections
- loan application
- settlement date
Under most contracts, the seller should provide a termite report. You should ask to see a copy of the termite report prior to closing – if there is any termite damage, your lender will require these repairs to be done before closing.
4. Apply for your Loan/Work with your Lender:
It is important that you apply for a loan promptly and provide all requested documentation (tax returns, paystubs, etc.) to your lender as soon as possible. If you lock-in an interest rate, make sure you don’t miss the lock-in expiration date.
Your goal is to obtain loan approval (a loan commitment) quickly. Failure to do so may cause delays. Your loan officer and processor must receive all documentation from you before they can submit your loan to the underwriters for final loan approval. Work with both your realtor and your lender to ensure that your closing can occur on time. Your lender should provide you with a “good faith estimate” of closing costs.
5. Fax your Good Faith Estimate to settlement company:
When you receive the “good faith estimate” of closing costs, fax it to us. We will use this to prepare a draft HUD-1 “Settlement Statement”. This is the form used to summarize all financial aspects of any residential real estate transaction. This will give you estimate of the money you will need to close your transaction.
6. Pre-Settlement Preparations:
Arrange for your:
- Move Carefully note your closing time so you don’t keep your mover waiting (they often charge per hour);
- Utilities Call all utility companies and have accounts established in your name(s);
- Homeowners’ Insurance Your lender usually requires a paid receipt and copy of the policy prior to closing;
- Pre-Settlement Walkthrough Your agent will “walk through” the home prior with you prior to the settlement to see the condition of the property.
The Closing: This is the grand finale – the moment when it all comes together. Prior to closing, check with us and your lender to make sure you have everything you need for the Settlement; you will definitely need a:
- Cashier’s Check (for your final settlement figure); we often don’t get final figures from your lender until the day before or even the day of closing; therefore, if you need to get a cashier’s check or wire money in advance of the closing, you can usually use the amount on your “good faith estimate” or preliminary Settlement Statement.
- Driver’s license or picture ID – for the notary;
- Homeowner’s Policy and Paid Receipt – bring this if you haven’t already given it to the lender;
- Any other lender required documents: check with your lender prior to closing to make sure there is nothing else (e.g. tax returns) that you need to bring to closing.
- Wiring Instructions Please call settlement agent for wire instructions for your transaction.