What to Expect and How to Prepare for Your Settlement Date
This is the day you have been waiting for! Your real estate settlement date is the date that you will sign all the official documents to complete the purchase. Traditionally this is also the day that you will get the keys for the home and be able to move in.
This discussion will take you through:
- Agreeing on a date
- Understanding timelines and expectations
- What to bring with you
- What comes next
Agreeing on a Real Estate Settlement Date
Goal
When it comes to a real estate settlement date in general, our primary goal is to find a date that is amicable to both sides.
For example some sellers would like to move out as fast as possible so they would like a quick settlement.
While some sellers need additional time in the home to move out.
We will break all those factors down below and what you need to know to position yourself to have the seller accept your offer!
Timelines and Expectations for Settlement
The average time it takes to get to settlement depends on a multitude of factors.
Traditionally in the DMV real estate market; the average settlement time is approximately 30 days. That means from the point the seller accepts your offer to the point you close on the home is 30 days.
The biggest factors when it comes to speed of your real estate settlement date is based on how you are financing the home:
● Cash – Settlement can happen within a week
● Traditional Mortgage – 15-60 Days
● First Time Buyer Program – 30 Days +
What factors influence settlement times?
Seller Needs
One of the key questions we ask during the information collection period is when would sellers like to go to a settlement.
If you as the buyer are flexible in this area it can be an important factor in the seller’s decision to work with your offer. For example if the seller needs time to stay in their home. You can offer them a delayed settlement. Compared to a seller that wants the home sold as soon as possible. Because they no longer live there, it could benefit you to close faster than the competition.
Note: In order for the seller to stay in the property past settlement a post settlement occupancy agreement must be negotiated.
Financing
Based on the type of financing you have selected can have an impact on processing times referenced above.
Lender Selection
Traditionally the lender plays the biggest role in how fast you can get to settlement. Lenders have to send your packet to what is called underwriting where they are analyzing your profile for risk.
They want to ensure that you are able to pay for your mortgage and not default.
The lender you use will depend on how fast their department works on your behalf. Typically local lenders in the DMV operate at the fastest pace which comes out as a huge benefit to you in a competitive situation where the seller wants to move quickly.
First time homebuyer programs
Specifically, Washington DC has some of the nations best first time buyer programs.
The first time home buyer programs are fantastic but those programs can complicate the offer process.
It is important to understand how much additional time those programs require to get to settlement. For example HPAP takes a minimum of 60 days to get to settlement. DC open doors can be completed in approximately 30 days.
Construction Delays
When buying a new home construction delays can push back settlement.
Repair Delays
If you are buying a resale home, there are some instances where we might request repairs during the Home Inspection contingency. If there are delays completing these repairs or the seller needs more time we can push the settlement back.
Legal Delays
There potentially can be legal delays with the city . There are specific legal requirements that the property must meet in order to go to settlement and if they are not met we have to get them in compliance beforehand.
How long does real estate settlement take?
The settlement itself takes approximately 30 minutes to an hour to complete. In essence settlement verifies two things. One that you know what property you are buying. The second, that you promised to pay back the mortgage.
Now that we’ve gone through timelines, let’s go through what you should bring with you.
What to Bring With You on Settlement Date
Bring Photo ID
On your settlement date, you’re likely going to be reviewing and signing documents related to your loan (if you have one) and the title of the home. In order to sign those documents and have your signature notarized, you’re going to need to prove you are who you say you are.
It might sound obvious but the first thing that you’re going to need to bring with you on settlement day is a Photo ID such as a passport, drivers license or military ID. In some cases, you may even need to bring two forms of ID, so if you haven’t been told one way or another, it may be best to bring two just in case.
Proof of insurance
Assuming you need a mortgage for the funding of your new home, you will also need to provide proof of homeowners insurance before the lender will issue you a mortgage.
While your mortgage is being approved, your lender should advise you on when to purchase the insurance, but even before then you can start shopping around.
While looking for a policy to purchase, you’ll want to shop around to compare prices and overall coverage that your policy will provide.
Friends and family is a great place to start if you are looking for a recommendation and if you are someone that has auto insurance, you can even find some additional savings by bundling your home and auto insurance together.
Cashier’s Check
On your closing date, it’s time to pay any of the potential closing costs such as down payment, property taxes and insurance. It’s important to note that some of the fees involved in closing on your home, such as the origination or appraisal fees, can be rolled into your mortgage rather than paid for up front but items such as homeowners’ insurance and prepaid property taxes can not be.
Cashiers Check is an important distinction to make note of. You can’t use your personal checks to pay for these costs as they normally are, especially when taking into account the down payment, a large sum of money. Cashier’s checks are certified by your bank and they confirm that you have the funds available in your account to cover the amount of money you have on the check.
Assuming everything goes well, your closing day should only take 30 minutes to 1 hour and you should receive your keys to your new home at the end. So now that you have the keys, what comes next?
What Comes Next
Freshen up the place
Now that you are in your new house, there’s a few things that you can do, but start by changing the locks. You never know how many keys the previous owners of the house had so you’ll want to keep your new place as secure as possible by changing the locks; You can even set up the appointment ahead of time to get the locks changed as soon as the day after closing.
Note: Here’s a locksmith in the DMV area that can get you taken care of.
Now might also be a good time to do any maintenance that the house needs such as painting or cleaning around the outside of the house. Assuming this is your house for the foreseeable future, you’ll want to ensure that you enjoy your space.
Update your information
Once you close on your house, it’s also time to start updating some of your information where an address is needed. Things that you should consider updating include but aren’t limited to the following:
- Driver’s License
- Car Insurance
- Credit cards
- Utility Companies
If you’re moving to a new state, it can be very important to get these things updated. For car insurance, updating your address could impact the premium you pay in either direction and for credit cards, to avoid your credit card company flagging your card for fraud, be sure to notify them of your change of address.
Explore the area and meet your neighbors
Introduce yourself to your new neighbors. If you are new to the area, knowing some of the people around you can make the transition much easier. Whether it’s recommendations on things to do or an introduction that turns into a lasting friendship, getting to know the people around you can be an important step in moving into a new house.
If you would rather keep to yourself, you can explore the area a little more. You probably did some research before buying the property, and maybe there is a local hiking trail or restaurant nearby that you want to check out, exploring your community can be one of the most exciting parts of moving.
Closing Out
Your real estate settlement date is what you’ve worked so hard for throughout your home buying journey.
By understanding what to prepare, bring, and what comes after the settlement, you’ll be able to make an easy transition into your new home!
Be sure to let us know how the process is working for you, or book a consultation if you’d like to learn more.
