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House Calls: Closing on First Home

Edith Lank on

Dear Edith: I am buying a house on my own, and this is my first time. The closing should be next week if all goes well, and I'm excited and also nervous about it. Do you have any tips on things I should look into while I'm waiting? Any advice about what to watch out for will be welcome. -- D. L.

Answer: Ask your agent to set up a last-minute walk-through of the property. You made your offer based on what you originally saw. If you now find a window that was broken since you first inspected the house, or a junked car in the backyard, don't discuss it with the seller. Your agent and lawyer will know what to do.

You'll be alerted a few days ahead of time as to the exact amount of money needed. No one wants to turn over valuable real estate on just a personal check, so you'll need cash or a certified check, which you can get at your bank.

It's simplest to have the check or money order made out to yourself. If anything goes wrong last-minute that'll save complications, and you can endorse it before handing it over at the closing. Take along a few personal checks as well, in case of minor adjustments. And bring proof that you are placing insurance on the property.

At closing, the seller gives you a deed to the property in return for the purchase money. But you can't give the seller the cash until the lender gives you the mortgage loan. But you can't get the loan until you sign the mortgage. And you can't sign the mortgage pledging the property as security until you own it. You can see why it all must take place at once, and in the right order.

You and the seller will adjust property taxes paid ahead or in arrears, and a last-minute title search will reassure you that the seller did not borrow money against the property earlier that morning.

I see that in your area, everyone gathers to, as they say in New England, "pass papers." (In a few states, including California, buyer and seller may never even meet. They sign all the documents ahead of time, and when everything is in order, an escrow agent, who holds all the papers, declares that the transfer has taken place.)

It's important to have problems cleared up before you hand over your check or the lender's. Once transfer of title has taken place, many matters are "merged" into the closing -- you will have bought the problems along with the property. Don't rely, then, on promises that something will be taken care of in the next few days. If it is impractical to solve a problem immediately, ask that part of the purchase price be held in escrow by a third party, to be turned over to the seller only after the matter is attended to.

Be sure to get the keys and the garage door opener. And, after all that, enjoy the closing! It'll be an exciting day.

Bone of Contention

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