Today on Dear Claire, Heather joins us to discuss the closing process for buyers
Kind of like an exciting relay race, closing process can get a little frantic as it comes to an end. In a perfect world, the buyer’s lender gets their documents to the title company well in advance of closing. At least two weeks in advance, but that rarely happens. It’s usually 12 hours before closing (ha!).
The lender is going to hopefully be sending your file for final underwriting a week before that date. This is a perfect world but in real estate things are rarely perfect, so that might be closer to 3-5 days before. Which is still fine and keeps everything on track. Once all your documentation is in the lender is going to send you what’s called a closing disclosure. It’s going to show you a breakdown of your payment, how much money you have to bring at closing, what your interest rate is, if you can prepay on the loan, etc. The disclosure is signed by the buyer, and then you have to wait three days before you can sign your closing documents. Within three days your loan documents are going to be sent to the title company. We use title companies here in Oregon but not all states do, as some states use lawyers. The title company contacts your buyer agent, one of us, and the buyer to schedule a signing. The actual signing process can take about an hour, which we’ll typically attend with you. What your signing is mostly disclosures for the lender saying that you’re not going to sue them because you didn’t make your payment and they then reported to you late to the credit bureau, etc. They let you know interest rate, your taxes, your insurance, and your monthly payment, over and over and over again. That is signed in multiple forms, acknowledging that you know what you’re signing. Then they give you a document of what your 30 years of payments look like (assuming you have a 30 year mortgage), and how you’ll pay if you pay it off in full. Once all that is done, within two or three days of your signing or closing, the money has been sent from your lender to the title company and the deed has transferred into your name. The seller no longer has that property under their name and you usually get your keys by 5pm that day, unless something else has been negotiated.
Be aware your lender is wiring the money to the title company, and that all wires are based on East Coast time. So if you’re signing on the west coast, our cutoff for wires is two o’clock. The signing has to happen within the first like six hours of business and if you don’t, then your closing date is going to be pushed back another day.
It is important to also check that your bank account numbers for wiring instructions are correct. I have seen this happen with numerous people, where one digit is wrong, the title company is wondering where the funds are and everyone is scrambling. Also, triple check that you are wiring funds to the correct title company and account. Recently a client received a strange email stating the wiring instructions changed. This turned out to be a scam. Wire fraud is very prevalent and scammers can literally access hundreds of thousands of dollars in a snap. So we make sure that you have the correct wiring instructions and all the title companies that we work with are sending that type of information through a secure link. If you get an email that looks fishy in any way, contact us or contact the title company.
And in the end we get the keys from the lockbox or from the listing agent. We often meet our buyers at the property and celebrate this exciting moment by handing them over to you – which is the really fun part for everyone.
Thanks you and send us more questions. We’re here for you. Take care.