1. Chapter 5 Closing the Deal
The Homebuyer’s Guide
Chapter 5
Closing the Deal

2. What Happens in the Escrow Process?
(Period from when offer is accepted through loan closing)
Loan application
Appraisal
Survey
Inspections
Insurance
The Homebuyer’s Guide

3. Preparing for Closing Setting the Date Meeting with the Lender
Conducting a Title Search
Informing the Utility Companies
Purchasing Homeowners Insurance

4. Cost of Insurance: External Factors
Geographic loss experience
Type of construction
Type of fire protection
House size
Type of contents
Condition of the house
Your credit score
The Homebuyer’s Guide

5. Cost of Insurance: Your Influence
Type of policy
Size of deductible
Optional coverages
Discounts
The company you choose
(Another opportunity to use the ‘Rule of 3’)
The Homebuyer’s Guide

6. Different Types of Insurance
Hazard or homeowners insurance
Flood or special hazard
Mortgage insurance
Title insurance
Mortgage life insurance
Home warranty policy
The Homebuyer’s Guide

7. Preparing for Closing Do a final walk-through inspection
Get a copy of the HUD-1 settlement statement
Get a cashier’s check
Sign the mortgage papers
Call the utility companies
The Homebuyer’s Guide

8. A Final Walkthrough
Inspect your home just prior to closing to be certain it is in the same condition that it was when you made an offer on the home. Find and label the following:
Main cutoff’s for water and gas
Emergency switch on the furnace
Switches for the main electric panel
Fuse or circuit breaker box
Manuals for the furnace, water heater and appliances

9. Questions to Ask the Seller
What is the history of the home?
Are there wiring diagrams or blueprints?
Are any appliances or repairs under warranty?
Who provides water and sewer?
What other services are available?
Who are the current providers for trash, internet for the home?

10. More Questions to ask the Seller
Are there any historical pictures of the home?
What seasonal maintenance has been done?
Who has worked on the house?
Is there extra (matching) paint available?
Are there any window screens, vents or coverings that come with the home?

11. Closing Documents Truth in Lending statement
HUD-1 settlement statement
Mortgage note
Mortgage or deed of trust
Affidavits
The Title
The Homebuyer’s Guide

12. Costs Associated with Closing
Application fee
Appraisal fee
Loan origination fee
Transfer and recording taxes
Title Insurance
Adjustments
The Homebuyer’s Guide

13. Types of Ownership: Who and how will you own your home?
Sole and separate: single person
Joint tenancy: equal, undivided shares, often with rights of survivorship. Joint Tenancy with right of survivorship is available only to married couples.
Tenancy in common: property is owned jointly, but if one owner dies, the deceased owner’s share goes to his or her heirs rather than the surviving owner.
The Homebuyer’s Guide

14. Summary
Review the HUD-1 Settlement Statement and the Costs Associated with your closing.
Look for earnest money, adjustments and escrow on the closing documents.
Decide on the Legal Ownership of the Home, Who
File all closing documents in a safe place in your new home for reference or questions
The Homebuyer’s Guide