Buying or Selling a Home

The Closing

What are some of the key documents signed at the closing?

Both buyers and sellers should expect to sign a lot of papers at the closing. Buyers might be asked to sign the following:

  • A promissory note promising to pay in full the loan and interest.
  • The mortgage document which secures the promissory note by giving the lender an interest in the property and the right to take and sell the property—that is, foreclose—if the mortgage payments aren't made.
  • A truth in lending form which requires the lender to tell you in advance the approximate annual percentage rate of the loan over the loan's term.
  • A typed loan application form.
  • A payment letter telling the buyer the amount of the first payment and when it is due.
  • An affidavit that the buyer's various names (if he or she has used more than one) all refer to the same person.
  • A survey form stating that the buyer has seen and understands the survey of the property and that it fairly depicts the property.
  • A private mortgage insurance application, usually required on loans with a down payment of less than 20 percent.
  • A termite inspection or other inspection form, indicating that the buyer has seen a report of any inspections that were made.

The seller can expect to sign the following documents:

  • The deed transferring title in the real estate from the seller to the buyer.
  • A bill of sale transferring ownership of any personal property that may be included in the sale of the real estate.
  • An affidavit of title in which the seller states that he or she has the legal right to sell the real estate and that there are no liens or encumbrances (judgments, mortgages, or taxes owed) on the property.
  • An affidavit as to mechanic's liens and possession indicating that the seller has not had any work done on the property that would give rise to a mechanic's lien and that there are no parties other than the seller entitled to possess the property.
  • An occupancy certificate indicating that a new home complies with the local housing code.

Both buyer and seller will also sign the following:

  • An affidavit specifying the purchase price and indicating the source of the purchase price. (This affidavit assures the lender that the buyer has not received any undisclosed loans from the seller that could negatively affect the buyer's ability to repay the lender's loan.)
  • A RESPA form developed by the federal Department of Housing and Urban Development and sometimes a separate closing statement, specifying all costs associated with the transaction.

>>What happens at the closing?
>>What is the closing statement?
>>What are some of the key documents signed at the closing?
>>What are some financial aspects of the closing?
>>What are some typical closing costs?
>>There can’t possibly be any more closing fees, can there?


Practical Law Home | Buying or Selling a Home | Basics of Buying a Home
Basics of Selling a Home | Why Real Estate Is Covered By Special Laws | Real Estate Brokers
The Purchase Contract | Financing a Home Purchase | *The Closing* | The Fair Housing Act
Where to Get More Information

Advertisement