A real estate closing is the last step in the execution of a real estate transaction and in the purchasing and financing of a property. In this article, we answer some of the frequently asked questions we get about the closing process.
How Long Does It take to Close on a House or Property?
After an offer is accepted, it may anywhere from three to eight weeks to close on the property. During this time, the home inspection, appraisal, and title searches will be conducted. Once the closing day or ceremony arrives, you and the seller will sign the necessary paperwork (i.e. property deed, bill of sale, transfer tax declaration, closing disclosure, etc.) to finalize the deal, and the funds will be transferred to escrow.
Where & When Does a Closing Take Place?
When you and the seller negotiate the contract, you agree on an expected closing date. As we mentioned, you should account for the time it will take to conduct appraisals, inspections, etc., and you should account for potential delays. Typically, closing ceremonies will take place at the closing attorney’s office, at the Registry of Deeds, or at the lender’s offices. The closing attorney will coordinate with the buyer, seller, and lender to finalize a date for the closing ceremony, and three days prior to the ceremony, they should be in communication with you (the buyer) concerning the closing disclosure.
Who Has to Present at the Closing in Georgia?
Many people wonder if the buyer and seller both have to present on closing day. Anyone whose name is on the loan or property title attends the closing along with the closing attorney. If a party who is supposed to be present cannot attend, they should send a representative, and this representative should have Power of attorney to execute the closing documents.
Who Covers the Closing Costs in Georgia?
In most cases, both buyers and sellers cover a certain percentage of closing costs. However, as a part of contract negotiations, either party can ask the other to cover all the closing costs, which typically amount to about 2%-6% of the purchase price.
Can My Loan Be Denied at Closing?
Once you are clear to close (i.e. your loan has been approved), your loan likely won’t be denied. However, a mortgage loan can be denied if you have experienced significant changes in your credit score, made a recent large purchase, lost your job, didn’t properly disclose other debts, or the property has issues.
What Should You Not Do Before Closing on a Home?
While you cannot control losing your job before closing, there are things that you can avoid doing to ensure you do not risk losing your new property. Before closing, you should not:
- Buy or lease a new car. Making a large purchase can negatively affect your debt-to-earnings ratio, which is something that lenders review when deciding to give you a loan.
- Make a career change. Even if get the chance to increase your salary, switching jobs can affect your relationship with your lender. On one hand, they may think you frequently change jobs, which can affect your ability to pay back your loan, and on the other hand, they will have to go through the validation process again.
- Open new lines of credit or bank accounts. Lenders may wonder if you are trying to hide cash or income if you open a new account. On the other hand, if you open a new line of credit, you may affect your credit score or raise some red flags with your lender.
- Miss any payments on existing debt. If you miss a payment or make a late payment, that will be reflected on your credit report and can affect your credit score. A day or so before your closing, your lender may run a new credit check on you, and the missed or late payment will be flagged, which can cause them to back out of the deal.
- Spend the money set aside for closing costs or the down payment. While you may be excited to furnish your new property or get yourself a housewarming gift, you should avoid encroaching on the funds that are meant to cover your closing expenses and down payment.
- Pay down any debt. In most cases, it would be celebrated if you closed a debt account and/or paid down debt. However, as we mentioned, you want to maintain your debt-to-earnings ratio and avoid lowering your credit score.
- Skip a home inspection. Some buyers try to cut down costs by not having their potential homes inspected. Unlike the home appraisal, which tells you how much a home is worth, the inspection provides you with details regarding problems with the property (i.e cracks in the foundation, old pipes, mold, things that are not up to code, etc.). If you discover a problem after moving in, you will not have evidence that the problem was there prior to the sale.
- Ignore your lender or closing attorney. Throughout the closing process, your closing attorney and/or lender will likely contract you often with clarifying questions and updates. The mortgage underwriter may need information or documents concerning your job, other property, or credit report information (i.e. details on why you missed a payment last year, etc.).
Can I Use a Personal Check to Cover Closing Costs & Down Payment?
Closing attorneys are not able to accept personal checks that exceed $5,000 at closing. If your closing costs and down payment will exceed this amount, you should plan to either wire the money or bring a cashier’s check.
How Can I Find a Reliable Closing Attorney?
In Georgia, a real estate closing attorney must conduct and manage the closing process. In most cases, the attorney represents the lender, which is why buyers and sellers sometimes opt to have their attorney present as well. Even though a closing attorney represents the lender, they can still answer questions for you if they arise, and their primary job function is to ensure the closing process goes smoothly. To find a reliable attorney, you should research attorneys (and ask schedule consultations to ask them questions) and investigate:
- What experience they have.
- How previous clients feel about their services.
- What their values are concerning communication, best practices, etc.
- When they are available/if they are taking on new real estate clients.
Who Pays the Closing Attorney’s Fees?
Typically, your closing attorney’s fee (in cases where they represent the lender) is included in the closing costs. Neither the buyer nor seller should anticipate paying the attorney separately.
What Happens After Closing Day?
Once all the paperwork is signed and the funds have been transferred, the buyer becomes the legal owner of the home or property. You can move into the property immediately unless you agreed to take possession of the property later. The seller may also need more time to complete agreed-upon repairs that couldn’t be completed during the closing process.
At Balbo & Gregg, Attorneys at Law, PC, our attorneys have over 40 years of combined experience, and we are known for being attentive and supportive. If you are closing on a property and need a closing attorney in Georgia, schedule a free case consultation with us online or by calling (866) 580-3089.