Hope you all had a great weekend and that you have been enjoying all our guest bloggers. We’ll try to keep adding to the variety of topics and authors, so keep the questions coming!
I got a question this weekend from a reader who is almost at the end of their home buying transaction. She wrote, “Hi Raymond, Thanks for all the great tips. My husband and I have an appointment to sign our closing papers this week. Can you let us know what to expect?”
In order to complete the purchase, there is a large amount of documentation that must be signed and reviewed to close the transaction so be prepared to spend about an hour completing the process.
Generally, the buyer will meet at the escrow company whose been retained to act as the closing agent. The escrow company’s job is to prepare the paperwork, collect and then distribute the money to the right parties in the correct amounts. That’s the simple version.
You will have two stacks of paperwork: escrow instructions and loan documents.
Escrow instructions are a summary of the salient aspects of the purchase/sale. For instance, things like the names of the parties, property address, purchase price and who pays which closing costs are spelled out. The escrow company prepares an estimated closing statement showing all of the buyer’s charges and monies on deposit. The closing statement will show exactly what you are being charged and how much money you’ll need to bring back to the escrow company to close the transaction. It should be explained line by line. If you have any question or uncertainty, ask questions.
Loan documents are prepared by the lender and include your Promissory Note, Deed of Trust, and Loan disclosures. The Promissory Note is the most important document. Be sure to check it to make sure the note reflects the same loan terms you were quoted by the lender, and if not, call the lender immediately.
Some more basic logistics… You will not need to bring money to the signing, but when you leave the signing you’ll know how much you’ll need to close. At this point in the process, the escrow company will only accept money by electronic wire transfer or a cashier’s check drawn on a California bank – no personal checks. You will also need to bring photo identification, such as, a valid driver’s license or passport. Your signature will be notarized and you’ll be asked to complete an identification statement.
I feel very strongly that the lender or mortgage broker should attend the signing. Their role is to ensure the loan documents are correct and be available to answer any questions you may have about the loan and documentation. Ask your lender whether a representative will attend your signing. I’ve learned by experience how important it is to have their input.
I feel even more strongly that the buyer’s agent attend the signing as well. It is the responsibility of the buyer’s agent to make sure that the escrow instructions accurately restate the purchase agreement, and the costs and charges are allocated properly. I attend all closings, as does my team. Ask your agent whether he or she will attend the signing, and if not, why not?
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Tags: first time home buyer, home buying, san mateo county real estate, san mateo real estate
Raymond Stoklosa, Broker/Co-Owner
Chela Stoklosa, Realtor/Co-Owner
