Closing on Your Home

All the financing, house hunting and negotiating come together in one final step — the closing. If you're pre-approved and you've saved enough money to handle the extra costs, then closing on your home is just a matter of signing off on some paperwork.

The Contract
Once you've found a home, made an offer and the seller has accepted your offer, the seller's agent draws up a contract specifying the terms and a closing date. When you sign this contract, you have officially agreed to purchase the home. Have a real estate attorney, or the real estate agent representing you, look over your contract. There are many small details that could make the difference between a good deal and a bad deal. An experienced professional can help ensure you're getting a good deal.

Contingencies
The contract almost always specifies contingencies. That means the contract is valid only if certain requirements are met. For example, if your financing doesn't come through you aren't required to purchase the home. Contingencies also cover home inspection, termite inspection, title search and several other processes whose outcome could nullify the deal.

Inspection
Don't skip the home inspection. It is one of the most important parts of the home buying process, and important that you are present and prepared to ask questions. There are many big problems with a home that can't be detected with an untrained eye. A home inspector will go through the entire home to make sure there are no problems, which could either affect the value of the home or cause major problems in the future. Types of home inspections include general home, pest, electrical, lead-based paint, heating and air-conditioning, foundation, sewer or septic system reliability, water systems and plumbing and others. If the home inspector finds any major problems that weren't disclosed before you signed the sales contract, you can use the inspection contingency to walk away from the deal or to renegotiate the price.

Requirements for Closing
A settlement agent will handle most of the closing process. You will be given an estimate of the closing costs and fees up front. Before you can close on a house, you will need the following:

• Title Search – This ensures the seller is clearly the owner of the house and that there are no liens against it.
• Title Insurance – If there is a problem with ownership, including fraud and forgery, the costs of dealing with those problems will be covered.
• Survey – In some locales a surveyor will be employed to make sure that the dimensions of the lot are accurate.
• Homeowner's Insurance – Since the home is the collateral for the loan, a lender will not give you a loan unless you have fire and casualty insurance. If you carry auto insurance, ask that agent for rates on home insurance. Insurance companies often give you better rates if you have more than one type of policy with them.

Closing Costs
Fees for closing a home can add up. Before you sign the contract, see if the seller will agree to pay for more of the closing costs. It’s possible that the seller won’t want to take on some of the closing fees, but it doesn’t hurt to ask. You may be able to work out a compromise that’s more mutually agreeable for everyone.