The Closing Process When Buying a Home in Farmington Hills MI

The Closing Process When Buying a Home in Farmington Hills MI

The Closing Process When Buying a Home in Farmington Hills MI: A real estate closing, also called a settlement, is the process of transferring ownership of a home from the seller to the buyer. In the context of real estate, “closing” is basically synonymous with “signing.” Reviewing and signing documents is the bulk of what a home buyer does during this process. But that’s not all that happens.

Summary: Come closing day, the buyer and seller will sign all the necessary papers to officially seal the deal; the property title and ownership get transferred from the seller to the buyer; the home buyer will sign a variety of documents prepared by the escrow/closing agent and will also pay whatever closing costs are due; and agent commissions and other funds are distributed by the escrow agent. 

The closing process is usually managed by an escrow agent and sometimes an attorney who specializes in handling real estate closings and preparing the related documents. In some states, the home buyer and seller can close separately at different dates and times. While in other states, both parties must attend closing at the same time and sit at the same table with their respective real estate agents and/or attorneys. 

Even though you and the seller may agree on a closing date, your agent will probably work with your lender and title agency to suggest a timeline that allows them enough time to correctly execute their end of the deal.  

The Steps at Closing

While the logistics mentioned above can vary, the steps at closing are basically the same.  

  • The home buyer will bring a cashier’s check to cover all remaining closing costs and fees. 
  • The property title will be signed over from the homeowner to the buyer, thus transferring ownership.
  • The closing agent (or lawyer or notary) will register the new deed with the appropriate government office. After that, the home buyer will be listed as the official owner of the property. 
  • The respective real estate agent(s) involved in the transaction will receive their commission fees. 
  • The seller will receive any proceeds they earned from the sale, once their mortgage balance and closing costs have been paid off.

Closing day documents

A real estate transaction is a complex process that involves a lot of paperwork, and there are many documents that buyers will need to sign on closing day. Fortunately, the escrow or closing agent will have all of the required documents prepared and ready for the buyer’s signature upon arrival at closing. 

There will be mortgage-related documents, legal disclosures, tax records, and more. It’s not uncommon for buyers to sign their name over a dozen times before all is said and done. Buyers will have to sign the property deed, bill of sale, mortgage agreement and note, transfer tax declaration, and closing disclosure. 

Once the buyer has finished signing all of the closing documents, and all funds have been properly distributed, the deed of ownership will transfer from the homeowner to the buyer. If it is a joint closing, the seller will then hand over the keys. If it is a separate closing, the seller’s agent might deliver the keys (This can vary).

How Farmington Hills MI homebuyers can prepare in the days leading up to closing

Knowing what happens in the days leading up to closing can reduce some of the stress and help ensure a smooth transaction. Here is what you can typically expect to happen: Your mortgage lender will send you a closing disclosure a few days prior to closing. Among other things, the closing disclosure shows how much the buyer has to pay in closing costs. The buyer will then need to obtain a cashier’s check in the amount stated in the closing disclosure.

In some cases, the buyer might wire the money to the title/escrow company, rather than paying by cashier’s check. Typically, the buyer brings a copy of the homeowner’s insurance policy to the closing, or an insurance binder, depending on what the lender requires. During the week prior to closing, last-minute underwriting issues may also be resolved in some cases. 

What Farmington Hills MI homebuyers need to bring on closing day

Buyers need to bring all necessary paperwork with them to closing to make sure nothing is missing, different, or overlooked. Some important documents include: 

  • Cashier’s or certified check – You’ll pay your closing costs with a certified check or a wire transfer from escrow.
  • Proof of homeowners insurance – Lenders require an insurance policy before closing   
  • Photo ID – You’ll need to bring a government-issued identification for the title company.

Closing day check list

Review the following checklist to make sure that you have everything in order so that the closing day process runs as smooth as possible:

  • Contact the closing agent – Once you know who your closing agent is and where they’re located,  contact their offices to see if they have any special instructions for you. They’ll typically have a list of items you’ll need to bring.
  • Review your closing documents – Legally, you should receive your closing documents 3 business days prior to closing. Make sure you read them so you understand what you’re signing and check for any errors. Double-check all of the basics: spelling, numbers, names, etc.  
  • Check the fees – Your most recent loan estimate should be close to your closing disclosure. Some fees may change a little, but there shouldn’t be any big surprises at this stage.
  • Review seller responsibilities – Review your final walk-through checklist to make sure the seller has taken care of all their responsibilities.
  • Be payment ready – Expect to write the check for closing costs. Plan in advance if you are transferring funds from another account so they are cleared.

How much It costs to close on a house in Farmington Hills MI 

Closing costs are the fees that third parties charge and typically include the home inspection fee, premium for homeowners insurance, appraisal fee, credit report charges, attorney expenses, and so forth. Some of these fees, such as earnest money and home inspection fees, will need to be paid before the actual closing day. On average, homebuyers will pay between 3% to 4% of the purchase price of the home in closing fees. For example, if your home costs $300,000, you might pay between $9,000 and $12,000 in closing costs.

The takeaway

Closing on a house in Farmington Hills MI may seem like a cumbersome process, but the toughest part of it is the waiting. If you enlist the help of a skilled Farmington Hills MI REALTOR and other experienced professionals at every stage of the process, you will feel confident and look forward to closing day when you get the keys to your new home!

Partner with award-winning Farmington Hills MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Farmington Hills MI for the past 20 years, offering his guidance and expertise to home buyers and sellers. Tom understands that buying or selling a home is a significant financial and life decision and that you are looking for someone you can trust.

As your agent, Tom will protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth transaction and the best results possible. He is able to provide the kind of knowledge, skills, dedication, and personalized service you need and deserve. If you or someone you know is interested in Farmington Hill MI real estate, feel free to reach out to Tom directly at (248) 790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

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