Buying a home is one of the most rewarding experiences, but for many, it can also be the most stressful. It is a very exciting feeling to have a seller accept your offer, but the work doesn’t stop there. In fact, the home buying process does not truly begin until you have begun the closing process.
When you work with The Davis Group, our real estate agents will walk you through the entire home buying process so you never encounter surprises. We want all of our clients to feel as informed as possible, so here is a general overview of what you can expect once you begin closing on a new home.
What to Expect at a Real Estate Closing
A real estate closing, also called a settlement, is the process of transferring home ownership starting from when the seller accepts an offer to when both buyer and seller sign all the paperwork. The length of the process varies depending on the individual situation, but your real estate agent will be able to give you realistic expectations for your individual situation. Generally, you can expect it to take 30-45 days unless something delays the closing.
There are two main parts to a home settlement: the mortgage and the title closing. As the home buyer, you will need to fill out and submit all necessary paperwork required by your mortgage lender. The seller, on the other hand, will sign the deed and hand it over to the buyer. This usually takes 1-2 hours if everything goes as planned.
When you work with an experienced realtor from the Davis Real Estate Group, we will help you network with local experts that you will need throughout the closing process, such as an escrow officer, mortgage lender, home inspector, attorney, and title insurance agent.
You will receive the closing disclosure a few days before the closing. This document will contain all important information about your loan, including
- Loan term, amount, and interest rate
- Estimated monthly payments
- New home closing costs
- Cash to close amount
- Loan disclosures
Your closing disclosure should also let you know exactly what you need to bring to closing. Read through the information carefully to make sure it is all correct.
At the end of a successful closing, you will be the new homeowner. After closing, we recommend thoroughly cleaning the home and changing the locks. Store all of your home closing paperwork in a safe place.
New Home Closing Costs
In addition to your mortgage down payment, you will also be responsible for closing costs. New home closing costs are additional fees and expenses you pay when you secure your home loan. Closing costs will vary but typically fall between five and six percent of the loan amount. Closing costs may include title insurance, attorney fees, appraisals, taxes, mortgage points, and other fees.
Your lender should give you an estimate within a few days of submitting a mortgage application, and you will receive an exact amount in your Closing Disclosure. Keep in mind that these new home closing costs are different from your down payment, so keep that in mind when you are calculating what you can afford and how much you can pay toward the down payment.
Things to Do Before Closing on a New Home
Before closing on a new home, work with your real estate agent to review the contract and prepare for closing contingencies. Contingencies refer to the conditions you may have included in your contract when you made an offer. These conditions must be met before the home purchase occurs.
Contingencies may include the following:
- Home inspection
- Appraisal
- Loan documents
- Insurance
- Final walkthrough
Discuss all of these terms with your agent and make sure you fully understand all the terms and contingencies before moving forward. If any of these contingencies fall through, your closing may not go through.
The closing process can be very time-consuming, and it’s easy to forget other important tasks that are not technically part of the closing process. Your realtor will guide you through every step of the closing process, but here are some additional things to do before you close on your new home.
- Book the movers/start packing
- Set up new utility accounts
- Call the locksmith to change locks
- Interview contractors if necessary
Since you will know your closing date in advance, we recommend taking care of these items as soon as possible to eliminate extra stress around closing. If you have children or pets, you may also want to arrange childcare and pet sitting services in advance.
Things Not to Do Before Closing on a New Home
It’s easy to think that once you have been pre-approved for a mortgage and a seller has accepted your offer, you are free and clear. However, your spending habits while in escrow can affect your closing to the point where you may lose out on your dream home.
It is best to avoid any big expenses and anything that will impact your credit score before closing. Here are things to avoid before closing on your new home:
- No not buy or lease a car
- Do not sign up for new loans or credit cards
- Do not change jobs
- Alert your lender of any influx of cash
- Don’t run up credit card debt
Keep your agent and your lender in the loop if anything comes up that may affect your closing. After you close on your home, feel free to spend your money on it as you see fit. You may want to invest in some new furniture and decorations, it’s just best to hold off on large expenses until after all paperwork is signed and official.
Close Confidently with the Davis Real Estate Group
At The Davis Real Estate Group, we know that closing on a new home is an important time in your life and can seem daunting for first-time homebuyers. That’s why we are committed to helping our buyers through every step of the home-buying process.
If you’re looking to buy a home in the North Dallas, Texas area, you can view all active listings on our website. When you’re ready, contact us to set up a showing or to discuss your dream home wishlist!