It’s the Day Before You Close on Your House. What’s the Drill?

Tomorrow is the day. Closing day. If all goes according to plan, you’ll soon cinch the deal on that dream house and it will be all yours. As the anticipation brews, you imagine the moment you’ll hear the sweet jangle of new keys and breathe a big sigh of relief. Now, you just need to get through the next 24 hours…

It’s a lot to process; we get it. So to put your mind at ease we’ve put together this helpful day-before-closing guide, which includes:

• Advice on how to keep your eyes and ears open for issues in the final walkthrough (and why you should never skip it!)
• Top questions to ask your agent to confirm the details, deal with any last-minute glitches, and tie up loose ends
• Your list of essential items for closing day (so you can pack your purse or backpack the night before)
• An overview of the closing day experience and what to expect as the buyer, so you can mentally prepare
• 5 tips to start thinking about the first few days in your new house

Go to the final walkthrough and keep your eyes peeled

Most real estate contracts stipulate that the buyer has the right to perform a final walkthrough, also known as a pre-closing inspection, within 24 hours before closing. You can opt to do the walkthrough sooner, but that creates a higher risk: something could still happen between the walkthrough and closing, catching you by surprise.

Note that the sellers are generally obligated to leave the house in “broom clean” condition when they move out, which means swept, vacuumed, and free of debris or excess stuff you haven’t agreed to keep. You’re also there to see if it looks like the sellers will be ready to move out soon… or if they’ve still got a lot of packing to do.

Normally the final walkthrough is a formality, but never (in a million years) should you skip it. Dolly Helbert, a top agent in the Triangle and surrounding areas of North Carolina who sells 80% more properties in Cary than the average agent in the area, recalls a time when her client was flying in from out of town to attend the closing. She decided to go check on the house because neither she nor the buyer had seen it in a couple of weeks.

“I walked in, and the ceiling from the kitchen was on the kitchen counter,” recalls Hebert.

“Had I just gone to closing, we would have had such a huge mess. [The buyer] would have bought that problem. It would have been their — and not the seller’s — concern.”

Barring that nothing major looks off, use the final walkthrough to review the home’s basic systems. Turn the lights on and off, check the air conditioner and furnace, flush the toilets, run water in the sinks, and open the doors and windows. Make sure the sellers completed any repairs they agreed to make and collect copies of the receipts from the various projects. Follow HomeLight’s guide on what to look for in the final walkthrough for more details on this step of the process.

Ask your agent or lender questions to confirm key details

The day before closing shouldn’t be a very stressful time, and working with a top agent will do wonders for your confidence come closing day.

“If I say to a first-time homebuyer, ‘This is what we’re going to do, this is how we’re going to do it; come with me, let me show you,’ then we don’t have that stress at the end,” Helbert explains. Still, you may have questions involving the house, your move-in timing, and your mortgage loan. Take the initiative and reach out to your agent or lender with any of the following questions:

Does the seller plan to be 100% out of the house on closing day?

These details should be outlined in the contract, but if you have any confusion about them, don’t hesitate to reach out to your agent. Some buyers assume that closing day is move-out day, and while that is often the case, it’s possible that you’ve agreed to something else in the contract and overlooked it in the whirlwind of details. It would be unfortunate to schedule movers in advance only to discover you need to wait three extra days to move in.

When will I get the keys?

Helbert says many buyers wonder when they will get the keys to their new house or assume that they’ll get the keys right at closing. That’s not always the case. In fact, buyers may have to wait to get the keys until after the county records the new property title. Recording is just the process that the local government takes to put the new property title on books and make it official.

Or, again, buyers may have to wait to get the keys until a much later date, which will be detailed in the contract between the seller and buyer. It all depends on what you agree to prior to closing, which a great agent will make sure you understand up until the day before closing. If not, don’t hesitate to ask your agent if you need clarification on this, or at any point in the process.

What are my closing costs?

Closing costs can add up to as much as 5% of your total loan amount. There are two main types of closing costs: lender and broker fees (such as credit reports, application fees, loan origination fees, and broker fees), and third-party fees (unavoidable costs like property taxes, title transfer fees, homeowners insurance, and the like).

Your lender is required to provide you with a Closing Disclosure outlining your final loan terms and costs at least three business days before you close on a loan, according to the Consumer Financial Protection Bureau. If you aren’t sure what you’ll be required to pay, clear up your confusion the day before closing (at the latest).

What potential snags should I be aware of on closing day?

Let’s say the sellers are still haggling over whether to cover your home warranty or how big of a credit they’re willing to give for a certain repair job. It falls on the agent to resolve these issues before closing day. “And if we’ve got a bad agent on the other side, [we have to] to hold them accountable and hold that seller accountable,” says Helbert.

How will I transfer the funds?

“A lot of times, buyers still have questions about money on the day before closing, even though we had sent them numerous emails and letters about how the money has to get to the closing — that it’s got to be wired in,” says Helbert.

According to The Mortgage Reports, a nationally-recognized mortgage and real estate news source for 16 years, buyers should not bring physical cash to closing, even if their title company accepts it.

“I was listening to a story yesterday about somebody that showed up with $100,000 in cash at a closing, and the attorney wouldn’t take it,” Helbert warns. “They didn’t want the liability. They didn’t want to go to the bank with $100,000 in a suitcase. They can be pretty picky about how they take money.”

Because large sums of cash can raise alarm bells of fraud, it’s usually best that buyers set up a wire transfer. Sometimes, though, buyers will show up to closing day with a certified check, an official check that is issued by a bank and usually considered more secure.

In this case, Helbert explains, an attorney would take the certified check at closing, but they usually won’t record it until the next day to make sure that it’s legit and will clear.

How to pack your purse the night before closing

It’s closing day. Congrats on making it this far! If you’ve picked the right agent to work with, you should feel secure and confident about signing your papers today and formally becoming the new owner of the house.

But what should you bring to the closing table? This checklist will help you ensure you have everything you need for one of the biggest days of your life:

Two forms of identification — one government-issued, and another with your name

Make sure you come to the closing table with two forms of ID. You’ll need to show the escrow agent that you are who you say you are! One ID must be government-issued, such as a driver’s license or passport, and include a photo.

The other ID can be a library card or some type of membership card but should also have your name on it. If you’ve had a change in marital status, then be sure to have documentation that reflects any name changes as well as your marriage license / divorce decree.

Proof of homeowners insurance

Most mortgage lenders won’t grant you a mortgage without proof of homeowners insurance because until your mortgage is fully paid off, the bank has a stake in your home’s condition. If you haven’t already sent over this documentation prior to closing, bring over your homeowners insurance declaration page which summarizes your coverage.

Separation agreement or divorce order

Going through a divorce or separation from your spouse can impact your loan status and home purchase in some states.

Ask your agent or closing officer whether you’ll need to have these documents in tow. You may need to show, for example, that you’re up to date on any child support or alimony payments to move forward with the closing.

Copies of your sales contract, Closing Disclosure, and additional forms you signed during the homebuying process

You might not need all of them, but it’s a good idea to have any papers you encountered throughout the homebuying process with you on closing day, in case you need to check back on a detail that would affect closing costs or your agreement with the seller.

Certified check or cashier’s check

You won’t be able to write a personal check for your down payment or closing costs. You’ll need a certified or cashier’s check (which you can get at your local bank), or arrange for a wire transfer to move funds from your bank account to the closing company’s escrow account.

Your lucky pen and autograph

They’ll have pens for you at the closing table, but have that writing hand ready to grace a lot of documents with your signature! You can expect to spend around an hour just signing papers. (Pro tip: Sign the closing documents with a legible signature of your full name… scribbles of your initials likely won’t fly).

This should help you get an idea of what you’ll need to bring to closing, but it may not be a comprehensive list for your situation, and not all of these suggestions will apply to every buyer. When in doubt, connect with your real estate agent, attorney, or title/escrow agent about which documentation you should prepare to have with you.

What to expect the day of closing, and how to prepare

With your ID and other important documentation ready to go, you can start to picture what tomorrow will look like: you, at a table, signing document after document. Promise it’ll all be worth it, though!

GPS your route ahead of time

Make sure to confirm the time, date, and location for the closing. Usually you’ll arrange to meet at the office of the settlement agent, title company, or lender that is coordinating your closing.

It’s a smart idea to Google how long it will take you to get to the location ahead of time so you know how early you’ll need to leave (be sure to account for any time periods where there could be heavy traffic and pad your plans with extra time accordingly).

You’ll be presented with documents to sign, and get the opportunity to ask questions about them

When you arrive, someone at the office may offer you some water or coffee. You will be there for a while, so don’t be afraid to accept the offer of a refreshment.

The closing agent will walk through and explain the gist of each document to you before you sign it. If you have any questions at all, no matter how small or silly they may seem, now is your chance to ask. Don’t be shy about it! It’s critical that you understand what you’re signing.

The seller won’t necessarily be there

The seller may be there to sign any documents that facilitate the transfer of the house. However, if the seller pre-signed the transfer documents, they may not be at the closing appointment at all.

Your agent will attend

Your agent should definitely be there, and this is where they’ll likely receive the commission check for the sale from the closing agent (it’s customary for the seller to cover the buy-side commission, so you don’t have to factor that into your closing costs. But that’s what’s going on when your agent gets a check).

Take a picture and exchange gifts

Despite the focus on paperwork during closing, this is also a moment to take in and remember. Maybe you want to snap a photo in the closing office with your significant other and agent to celebrate the end of this journey together.

You’re not expected to bring your real estate agent a gift, but if you want to thank them for their help along the way, check out HomeLight’s guide featuring 25 great real estate agent gift options for this occasion. Your agent may show up with a housewarming gift (such as a new piece of home decor, gift card to a restaurant, or bottle of wine) to show their appreciation for your business and wish you well in this new chapter.

Get ready for the first few days in your new house

Whether you’re able to move in on the day you close or in the near future (which will be stipulated in the contract), ideally, you’ve already been preparing for the move as closing has progressed. Here are a few last-minute tips to remember once you get the keys to your new abode.

1. Do another walkthrough. There may be items you missed. Make note of them, if applicable. This also serves as an opportunity to learn the house better.
2. Check smoke and carbon dioxide detectors to make sure they’re in operating condition.
3. Deep-clean the house before you move your belongings in (even if it looks clean). Pay special attention to HVAC filters, electrical kitchen appliances, water filtration systems, and carpets.
4. Get the locks changed in case the previous owners, wittingly or unwittingly, still have a master key floating around. This will make the house feel more like yours.
5. File closing paperwork and other important documentation for safekeeping.

The day before closing: You’re almost to the finish line!

It’s the Day. Before. Closing.

Wow!

Think about the weeks or even months you sifted through home listings, booked showings, and spent precious evenings attending open houses. Take a minute to appreciate how far you’ve already come, and how close you are to wrapping up this life-changing purchase.

Hopefully, you’ve had a positive experience up to this point, thanks to working with a top local real estate agent who’s helped you each step of the way. If that’s the case, when you finally wake up to realize it’s the day before closing, you’ll be mentally, emotionally, and financially prepared to deal with tomorrow, no matter what it brings.

Header Image Source: (Andrea Piacquadio / Pexels)