In Colorado, the closing completes the home purchase process. The buyer pays the seller the money for the property, and pays other charges including loan fees and title company closing costs. The seller signs the deed transferring ownership to the buyer, pays his own closing costs, and hands over the keys to the buyer. You own the property and the seller pockets the money. It’s basically just that simple.
Generally, however, if a good faith effort has been made by competent agents, loan officers, and title officers to pull everything together, the closing should tend to be a pleasantly boring event. The seller signs the deed, several financial statements and a couple of disclosures. The buyer signs a similar number of real estate documents, and then signs a three inch stack of documents and disclosures from the lender. Forty-five minutes later, the title company’s closer leaves to make copies of the closing documents while the buyer and seller exchange keys and pleasantries. It’s done. It is a simple procedure. It sometimes feels like a bit of a letdown after the intensity of other phases of the purchase process. But as anyone who has been through a difficult closing will tell you, this is one event where “boring” is what we’re working towards.
What Happens and Where?
One of the closer’s goals will be to move the closing ceremony along expeditiously, since during busy times the title company may have closings scheduled ever hour on the hour. You will typically notice some tension between the closer’s responsibility to explain documents and their desire to move the process along. Stay focused on the task, but don’t forget that this is a big deal. If you have questions or concerns, raise them. Mistakes are sometimes made in the closing and loan documents. Again, you will probably have little latitude to change anything in the closing documents, but you should understand what you are signing. As indicated in the previous section, reviewing important documents prior to closing can be a big help.
What You Need to Bring
Real Money. In Colorado, you need to bring “good funds” to closing. That means you either need cash (not recommended), money that was wired to the title company, or a certified bank or cashiers check. If you bring a personal check, or if the wired funds have not arrived, you won’t close. As noted in the previous section, you should have received a precise statement of how much you need to bring to closing a day or two before the closing occurs. If not, you need to get the best estimate you can get from your lender or from the title company. Then wire funds or bring a cashier’s check for at least a few hundred more. The title company can write you a check for the difference at closing. In fact, it is rarely a bad idea to have the check made out for $200-$300 more than you think you’ll need, in case someone discovers a charge that was missed. It is also a good idea to bring a checkbook with you. If you are bringing a cashier’s check to closing, it is best to have it made out to you rather than to the title company. You can then sign it over to the title company at closing.
Photo ID: The title company will require some type of photo ID to verify that you are who you say you are. Most people use their driver’s license. Again, if you don’t have an acceptable photo ID, you won’t close.
Homeowner’s Insurance. If you haven’t already provided the title company with proof that you have the property insured, they will require that you bring documentation from your insurance company to the closing.
From the Seller at Closing
Utilities Transfer. Verify that the seller has called utility companies to terminate their service. If they haven’t, you may have troubles getting things transferred into your name.
Contact Information. Try to get the seller’s new phone number and ask if you can call with questions. This can be a lifesaver if you discover a quirk in the way something works once you’ve moved in.
Basic Home Information. If you don’t know where the mailbox is, what the combination is to the key pad on the garage door, or where to put your trash out, now is the time to ask.
Who are the Neighbors? If you haven’t already, you might initiate a discussion about the neighbors. It can be useful to know if there is a neighborhood expert on gardening or a teenager who loves to baby sit.