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Getting Ready to Close

Closing day can be very exciting, but it can also be a little intimidating, especially for the first-time buyer or seller. There is a lot of paperwork involved, and there could be a room full of people, some of whom you may never have seen before. How can you prepare for the closing, and what should you expect when you get there?

Roll Call: Potential Players

  • Closing agent, who may work for the lender or the title company
  • Attorney(s) representing the buyer and/or seller (the closing agent may be an attorney)
  • Title company representative, to provide written evidence of the ownership of the property
  • Seller
  • Seller's agent
  • Buyer (or mortgagor)
  • Buyer's Agent
  • Lender (or mortgagee)

Closing for the Buyer

Before closing, gather all of the paperwork you have received throughout the home-buying process: your original good-faith estimate, the contract you signed, any proof of title search and insurance (if these were necessary), flood certification, proof of homeowner's and mortgage insurance, appraisal and inspection reports. You will also need to make sure you have the closing funds, usually in the form of a cashier's check, money order or bank check, as personal checks will not be accepted. Bring photo I.D., too, as this will probably be required in order to notarize documents.

You may also, if your contract grants you the right, wish to schedule a walk-through inspection of the property 24 hours prior to closing, to make sure that the property has been vacated and left in the condition specified in the sales contract. If the house is not in the condition specified, you may have the right to delay the closing or to have the seller deposit money in an escrow account to cover any necessary repairs.

The paperwork you will be required to sign at closing will likely include the following:

  • HUD-1 settlement statement: detailed list of all costs related to the sale of the home, giving the amount due to and from each party
  • Truth-in-Lending (TILA) statement: states the annual percentage rate and the total cost of the loan over its life
  • Mortgage note: indicates the amount and terms of the loan, and what the lender can do if the borrower fails to make payments
  • Mortgage or deed of trust: secures the note and gives the lender a claim against the home if the borrower fails to live up to the terms of the mortgage note
  • Tax Proration Agreement: acknowledges that taxes have been prorated between buyer and seller using the best available information, and that they agree to recalculate the tax proration when the actual bill becomes available
  • Notice to Buyer: Information about the survey and termite inspection and any clerical errors
  • Purchaser's Affidavit: states that the buyer has no knowledge of any matters that may adversely affect title
  • Certificate of occupancy: for new construction only

Closing for the Seller

You will need to do your own final walk-through of sorts, to ensure that the property is in the condition you guaranteed. If there are any problems, be prepared to offer the buyer a cash settlement in lieu of delaying the closing. You should also gather up all of the paperwork you have received over the course of this process, and bring it to the closing along with a photo I.D.

You will also need to sign quite a bit of paperwork at closing, typically including the following:

  • HUD-1 settlement statement: as above
  • Tax Proration Agreement: as above
  • Affidavit of No Lien: certifies that the seller is the true and lawful owner of the property, that there are no undisclosed liens against the property, and that there are no other matters which would adversely affect title to the property
  • Mortgage Payoff Statement: indicates which mortgage is being paid off and acknowledges that the borrower listed on that mortgage is ultimately responsible for its payoff
  • Correction Agreement: allows the closing agent to fix any minor mistakes made during the closing process, such as forgetting to add a date next to a signature
  • Warranty Deed: transfers legal ownership of the property (recorded in the public record)
  • 1099-S Exemption Form: states that all criteria exempting the requirement for reporting this income to the IRS have been met (If not, a 1099-S form will be issued.)

Post-Closing Procedures

It's not (quite) over once it's over. After the closing, the title company must put all of the lender's signed documents in order and return them to the lender and must also pay off the existing mortgage(s). Real estate taxes may need to be paid as well, and a title company representative will take charge of this, too. The deed and mortgage must be recorded by the Clerk of the Circuit Court and entered into the permanent records.

Once the recorded documents are returned to the title company, the title is once again updated and the recording numbers verified. The satisfaction of mortgage, which should have been paid off by now, should also show up on the final title update. Once all of this is done, the final Policy of Title Insurance can now be issued and mailed out to the new property owners and to their lender. It may take up to 10 weeks after closing for the final policy to be issued.

At, we have successfully walked many buyers and sellers through the process of closing. For more information about our Tampa Bay real estate services, please contact us at your earliest convenience.