Love Live DC: Homebuying in 2018 — Step 9: Settlement

This column is written and sponsored by D.C. real estate agent and Edgewood resident Jessica Evans. Email her questions at  [email protected].

We’ve been flying through the homebuying process and we’re finally on the final step — settlement! If you’ve made it this far, you’re on the fast track to homeownership.

To some buyers, I think that settlement seems like it is going to be more of a grand finale than it usually ends up to be, spoiler alert — there are no balloons or confetti. In exchange for what is likely the largest check you’ve ever written, you uneventfully get a few sets of keys and to sign your name hundreds of times.

But what actually happens at settlement? How should a buyer prepare? Let’s look at the final steps of the homebuying process in detail:

Preparing for settlement: Most importantly, a buyer’s #1 priority is making sure that the funds necessary to complete the transaction are received by the settlement date. This includes the loan (which is sent directly to the title company by the mortgage provider) and any funds that the buyer is responsible for (including down payment and closing costs).

It is important to note that most title companies do not accept cash or personal checks — it is recommended that a buyer work on getting their funds to the title company no later than the day before settlement to ensure no delays or issues.

Other things that you will want to have completed include setting up utilities, scheduling a move (in a condo building) and preparing any last minute questions for the seller.

The pre-settlement walkthrough: This is typically the last visit to the property before taking ownership, the purpose is to either ensure that any agreed upon property condition requirements are completed (ie. home inspection repairs) or that there have been no changes to the condition of the home. It’s your final opportunity as a buyer to see that the basement has not flooded, a tree branch hasn’t fallen through the roof and that what you are about to buy is in fact what you are expecting.

After you sign the documents, it is your home and any issues after this point are unfortunately yours to deal with, not the sellers.

With this in mind, I recommend doing a walkthrough no more than 24 hours before settlement, or planning to go back just before just to make sure. I’ve never actually found anything catastrophically wrong during a walkthrough, but it’s worth the visit just to make sure.

Settlement (aka closing): This is when the documents transferring ownership of the property are signed along with the loan documents and typically when the keys are exchanged.

A seller will often sign in advance and may not be at a buyers signing. All buyers who are on the loan documents or contract need to attend settlement or make other arrangements in advance such as a power of attorney.

It is important that you schedule your settlement date for a day when you can be available for settlement, during business hours. The signing process typically takes between 1-2 hours, occasionally longer if there are delays.

As a buyer, you may request all of the settlement documents in advance from the title company — if you are going to want to read them in detail then I highly recommend making these arrangements.

Post-settlement: It’s official, you’ve completed your home purchase! Enjoy these celebratory moments as much as you can while they last! Buying a home is a huge milestone regardless of what you end up buying, now it’s time to make it your own.

Thanks for following along with our Homebuying in 2018 series! If you have any questions or would like information on something that I didn’t cover, feel free to send me a message — [email protected].