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What to Do and Not Do When Closing on a House

howard hanna couple receives keys after closing on a house

So you’re getting close to closing on a house – congratulations! Once your closing date passes, you’ll become the legal owner of your new home. Between now and the closing date, however, there is still a lot that you’ll need to do.

While this will be a busy time, it’s also very manageable! In addition to following the advice of your real estate agent, you’ll want to keep our tips in mind about what to do, and not do, as you’re closing on your house:

Do: Manage the Paperwork for Your New Home

When buying a new home, you’ll often need to provide important paperwork to multiple parties involved in the process, such as the previous homeowners and your mortgage company. Ensuring this paperwork arrives on time is essential, as an error could get in the way of your buying the house.

In addition to providing any documentation requested in a timely manner, be sure to do the following:

  • Ensure your agent and mortgage company have the most recent copies of your pay stubs and bank statements.
  • Ensure that any ongoing payments on credit cards, loans, and rental/mortgage accounts are paid on time.
  • Maintain a paper trail on everything connected to your application to buy a house.
  • Provide your real estate agent with a copy of your pre-qualification or commitment letter, as well as your mortgage representative’s contact information.

You’ll also need to ensure you walk away from the closing appointment with particular pieces of paperwork. Specifically, you should plan to:

  • Obtain a legible and fully executed copy of your purchase contract, signed by all parties.
  • Make a copy of your escrow deposit check provided with your contract offer, and provide evidence that it has been cashed by the closing agent.
  • Ensure that you have homeowners insurance, and proof of insurance, prior to the closing date.

Do: Dot Your I’s, Cross Your T’s, and Watch for Red Flags

In addition to managing paperwork, you’ll want to dedicate some time to evaluating the house you’re interested in buying, as well. Specifically:

  • Take the time to evaluate if a TLC or ‘fixer-upper’ house is worth buying.
  • Ask your agent if a property is located in a flood zone, and discuss purchasing flood insurance.
  • Consider having a home inspection conducted as part of your purchase contract.
  • Consider negotiating a homebuyer warranty as part of your purchase offer.
  • Confirm the property taxes you would owe with the appropriate municipality and/or school district.
  • Conduct a final walkthrough before your closing date to ensure that the property is in the same condition as when you put your offer in.

There will likely be many questions that come up about a home prior to your closing date. Be sure to talk to your agent about all of your questions! It’s their job to answer questions and to ensure you completely understand everything involved with your pending purchase.

Don’t: Make Any Financial Errors

While there’s a lot that you should do when buying a house, there are also things you should avoid doing – most of them having to do with your finances. If you’re preparing to close on a house, be sure not to do the following:

  • Apply for or take out new credit cards, auto, or personal loans, or have new credit inquiries in your credit bureau file during the course of your loan process and closing.
  • Make any large, unverifiable, and undocumented deposits or withdrawals to your checking or savings accounts.
  • Quit or change employment without notifying your lender.
  • Write any checks if you have insufficient funds.
  • Take any cash advances on credit cards to pay for your escrow deposit.
  • Withhold payments to accounts to be paid off in closing without first discussing it with your mortgage representative.
  • Make a “contract purchase offer” for an amount higher than your pre-qualification or pre-approved amount without first discussing the details with your mortgage representative.

This is just an overview of the things you should and should not do as you prepare to close on a house! If you’re looking for even more information about buying a home, we can help. We wrote the Essential Guide to Buying a Home to help guide you through the entire process of purchasing a home. It’s full of articles, questionnaires, and tips to help you through this process from start to finish. Want your free copy? Download it today!

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Tags: , , Last modified: June 26, 2020