What Happens On Closing Day When You Sell Your Home
Closing day is the real goal whenever you’re selling your home. Finding a buyer is your first goal, but closing the sale is the final goal, the end of the game. Paying off your mortgage and getting your proceeds check is what it’s all about.
So, how can you get prepared for your closing day, since you may be in the midst of moving and thinking about a thousand other things that day, too. The most important thing you can do when you’re selling your home and heading down the home stretch toward closing is carve out a time and a space to really absorb all the numbers on your HUD-1 form.
It’s also called a Settlement Statement and it tells the whole story of where all the money goes at closing. It is supposed to be available to both the buyer and the seller at least one full day prior to closing. Depending on where you are closing your real estate transaction, it may be prepared by the closing department of your broker’s office, or it may be prepared by a title company or a lawyer. Whoever prepares the HUD-1 form should have your contact information in the whole packet of documents, but that is no guarantee that you will be contacted.
My suggestion is for you to be very pro-active and give your agent or your title company representative a call a few days before your closing is scheduled. Ask for the name of the person who is actually preparing the HUD-1 and ask to speak to that person. Find out when your HUD-1 will be available and give him or her your email address to email it to you. And if you don’t see it by the date that is two days before your closing date, call that person again. Ask for your HUD-1 again.
Reviewing your closing statement and understanding it are two different things. That is why you need time to absorb it and ask your agent or your title company representative to explain anything you don’t understand. I am not exaggerating when I tell you that nearly every HUD-1 form I’ve ever seen for the first time contained errors. It’s not that the preparers are incompetent, not at all. It’s that the numbers are a moving target of sorts.
They are computing property taxes and mortgage balances that change on a daily basis. Oh, and property insurance escrows, those change daily as well. Now you can see why it’s important to ask for the form a couple days in advance, giving everyone an opportunity to do the calculations and cross-check them with other people. This is the best preparation for a smooth closing day when you’re selling your home.