How to Have a Stress-Free Settlement Day

How to Have A Stress-Free Settlement Day

Love Buying a Home series – Week 13

This step-by-step series will take you through the entire home-buying process — from finding a buyer’s agent to settlement day, and all the details in between. Every first-time buyer will find this information-packed series easy to follow and understand.

This series wraps up today but stay tuned next week for a bonus article on maintaining your new home.

You are almost a homeowner! But before you can celebrate, you’ve got to gear up for a successful settlement day. And that means no surprises, no delays, and no leaving without the keys to your new home.

There is a lot to do on the days leading up to your closing and settlement. You’ll be better prepared and on top of everything if you know what to expect. We covered some of these tasks in last week’s article, Almost There…Pre-Closing Details for Buyers, so be sure to read that one too!

We’ll cover some of those tasks again but will also discuss more of what happens during the settlement so that you stay calm and know what to expect.

Here’s a handy breakdown of what you need to do at each stage of the process:

Pre-Closing Tasks to Complete:

Get homeowner’s insurance. Make sure that it starts the day of the closing; no later, even if you are moving in later. Your Loan Officer (me), will help you get this started at the beginning of the process.

Don’t hurt your credit or open new debt before closing. Do not do anything that could change your financial circumstances, such as opening a new credit card account, getting a new auto loan, charging too much on your current credit cards.  Even buying furniture before your settlement is a bad idea.  This could delay or change your ability to qualify for your mortgage. So hold off on any shopping sprees for your new home!

Connect your utilities. Make sure you make it effective for the day of settlement, even if you are moving in after settlement.  The seller will turn them off in their name the day of settlement since they will no longer be the owner of the home.  To avoid any reconnection fees, make sure the utilities start in your name the day of your settlement.

Give yourself enough time to move funds around.  You will need to wire your funds to your title company so those funds are there are ready for settlement day. I typically recommend sending funds about 24 hours in advance of settlement, but be sure to check with your bank beforehand to make sure you initiate the wire in time. Most title companies require a wire, but some may accept a certified check so check with your agent so you’re prepared.

Settlement Day To-Dos and Logistics:

Your Final Walk-Through

You will be allowed to do a final walk-through of your home prior to closing. Schedule it earlier in the day so you can complete it before you head over to the actual closing. It should take about 30 minutes.

This is your opportunity to see if any damage has been done to the property and if any agreed upon repair work has been completed. Carefully go through the home this one more time to see if anything is amiss since you have the opportunity to bring it up at your settlement (not afterward!). 

You are not doing another inspection, but just making sure that any repairs that were agreed upon have been done and ensuring the home is still in the same condition as when you wrote the contract. 

What to Bring to Closing

• Bring your driver’s license or some form of photo ID.
• The settlement company will calculate the amount of money you need to bring to the closing.  You will have already wired funds or prepared a certified check for that amount.  Also make sure you also bring your checkbook just in case any minor last minute corrections need to be made. 
• Bring all important documents that you have gathered during the home-buying process. The title company should have a copy of the contract of sale, but you can always have a copy on hand in case anything comes up during signing. 
• Review a copy of the Closing Disclosure form (it replaced the HUD-1 Settlement Statement). This form lists all final terms of the loan you’ve selected, final closing costs, and the details of who pays and who receives money at closing. Your Loan Officer should send you a Closing Disclosure at least three business days before closing.

What to Expect at the Closing

You and your agent should plan to attend the closing at the specified time at the settlement company’s offices. The sellers also will be there with their agent unless they scheduled a separate time to sign.  Many closings can take an hour or more, so plan accordingly if you have to take time off from work.

This is the day where the sellers will legally transfer the property to you. The settlement company acts as a third party overseeing the terms in the contract to ensure they are being carried out and the transfer of ownership occurs.  They don’t represent you or the seller, but the terms of the contract. 

This company also handles the closing process for that day. This is to ensure that all parties involved (you, the seller, your agent, their agent) can properly oversee the transaction.  

The settlement company will handle the documents, money, and any other items from all parties and make sure that everybody gets paid where necessary. 

Stay calm! You will be signing a lot of documents that day so make sure you understand and know what you are signing. Ask questions and confirm amounts if necessary.

Congratulations … You bought your home!

This is the part where we high five and celebrate a job well done.  You did it!  You’re all set to move into your new home now that you’ve made it through your settlement.  It’s time to celebrate and start unpacking.

Now that you’re a homeowner, you’ve got to take care of your new home. Next week’s bonus article, Maintaining Your New Home, is perfect for you. I hope you have enjoyed this Love Buying a Home series and that it will help you become an informative and confident buyer. And, remember, you aren’t alone.  I’m with you every step of the way and will make sure everything gets done so that you enjoy the process of buying a home as much as you love living in your new home too.