7 Steps to a Stress-free Home Closing

You’ve already cleared several hurdles by finding the right home, negotiating the best price, and securing favorable
financing. The last obstacle on your homebuying track is the closing, which can be both tedious and tense. By
knowing what to expect and doing some legwork, you can put your closing behind you. These seven steps will
guide you through a smooth closing.

1. Set a closing date
Your real estate agent will work with the seller’s agent and title company to schedule your closing date. Be sure it
meshes with the end of your lease or the sale of your existing home and a time when you’ll able to play hooky from
work. If you’re tight on cash, schedule your closing for the end of the month because that’s when you’ll have to
pay the least amount of interest at the closing table.

2. Gather your funds
You may be required to bring funds to the closing. If they’re not easily accessible, arrange early to transfer them to a
liquid account to avoid last-minute problems. If the title company requires the funds in the form of a cashier’s check,
also leave time to stop by the bank and pick one up.

3. Purchase title insurance
Title insurance protects the policyholder against trouble with a home’s title. Your lender will insist that you
purchase a policy to protect it. You should also consider purchasing what’s called an owner’s title policy from the
same insurer, which protects you from fraudulent claims against your ownership and errors in earlier sales. In some
areas, sellers traditionally pay for the buyer’s title policy. Shop online at Closing.com, EasyTitleQuote.com, and
FreeTitleQuote.com. If your home has been sold within the past few years, ask the prior owner’s insurance company
for a reissue discount.

4. Line up homeowners insurance
Get quotes and compare policies to be sure coverage will be in effect by your closing date. An annual policy should
run $500-$1,000, depending on your home’s size, age, and amenities. If you live in an area where natural disasters
occur, like earthquakes, floods, or hurricanes, you’ll need separate insurance to protect your home.

5. Review your good-faith estimate and HUD-1 settlement sheet
Your lender must provide a good-faith estimate of your closing fees. Some of those fees can’t change, and others can
rise by 10%. Before you go to the closing, read your good-faith estimate, compare it with your HUD-1 settlement
statement, and question any fees that increased.

6. Do a walk-through
Schedule an appointment to walk through the home one last time just before your closing. Make sure repairs you
requested have been made, no major changes have occurred since you last viewed the property, and that the sellers
left anything they agreed to leave and took all their belongings.

Also test electronics and appliances, such as the doorbell, dishwasher, washer and dryer, and oven, to ensure they’
re functioning properly. Do the same with the hot water heater and heating and air conditioning systems. Walk the
yard to be sure no plants or shrubs have been removed.

7. Resolve issues identified in your walk-through
If your walk-through uncovers problems, you can delay the closing until the seller corrects them. But that’s often
not feasible because your lease is probably over and you’ve already scheduled movers. Another option is to
negotiate a discount to your sales price to cover the cost of the work needed. If the air conditioning is on the fritz
and a contractor says the repair will cost $500, ask that the sales price be reduced by that amount. If you make that
request at closing, however, be ready for a delay while the title company redoes the paperwork.

A third option: Have the title company hold a portion of the seller’s proceeds in escrow until the dispute is resolved.
Once that happens, the funds will be released to you or the seller, depending on the outcom.

7 Steps to a Stress-free Home Closing