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A First Time Homeowner's Perspective on Closing

Insights on the closing process from somebody who's recently been through it

Describing the closing process without going through it is a challenge.  It’s like trying to describe skydiving without doing it. Sure you can try to imagine it, but without a first person experience it’s impossible to relate. I recently closed on my first condo (thanks!) and learned a lot of things I wish I had known the first time. Every transaction is different, however what to expect from the overall process is the same.

Here are some lessons I learned and things to keep in mind as you go through the process. The most important thing I learned: the process may seem challenging or scary but it doesn’t have to be.   Trust your Agent.

Choose your Team Wisely

I was fortunate to work in the real estate industry and had access to numerous real estate agents and loan officers.  I chose my team based on reputation, knowledge, and who fit my personality.  I ended up with two amazing people helping me through the process. I realized in retrospect, one of the reasons why my transaction was so painless was due to the hard work of my team. You’re constantly learning throughout the home ownership process.  You will have your mouth on the faucet of real estate knowledge and you are constantly asking questions during closing.  It’s imperative that your agent, loan officer and all their team members work well with you, and that they have your best interests in mind.

There will be a lot of paperwork and details to nail down when closing.  Having a team that’s competent, skilled, and detail-oriented will ease some of the stress. It will also put your mind at ease while you cope with the heightened stress of balancing life and your first closing.

Don’t Stress the Loan Qualification

Getting qualified for your home loan may seem like the most daunting task in the home ownership process. In reality, it’s mostly painless.  The hard part is saving the money and budgeting, the actual qualification is fairly simple.  Collecting all the documents only takes about an hour, and if you have online banking probably even less than that.  Reading over the condo documents, the home inspection, and insurance will take much more of your time during the closing process.  

I guess what I'm saying is conserve your energy!  This is a marathon, not a sprint.  Prepare yourself mentally and remain patient and vigilant throughout the process.  

Not knowing how Closing Works is O.K!

It’s your first time, you’ll learn as you go. I was nervous that I hadn’t studied up enough or asked enough questions beforehand to better prepare for owning a home.  Don't worry about knowing every little detail before starting the process.  Remain engaged and don’t be afraid to ask questions when you're confused during the process, I never felt like any of my questions were “dumb”.  You'll have time to understand what you're signing before you sign it.

I can’t stress enough how having a good agent and loan officer helped in this regard.

Only Worry about what you can Control

This was the largest purchase of my life.  I wanted it to be perfect.  As the transaction progressed, I realized that I was not a real estate expert, and would have to trust my agent and loan officer on many aspects.  Even with my expert agent and loan officer, I wanted to dot every i, cross every t, and have a sense of control over the process.  At a certain point, you have to put some trust in your team and only focus on the things you can control.

The seller countered with a bad price? The inspection came with issues?  Don’t get stressed. I realized that no matter how much I worried about each aspect or wanted things to go as planned, I could not control everything. Prepare for the worst and hope for the best.

Double Check Everything

Offer letter, loan documents, amendments, there are a lot of things you will have to read through.  You don't have to read through everything (there’s a lot!) but you should.  This is your transaction, and even with the best experts helping you it's in your best interest to double check everything yourself.  Do your due diligence.  Your agent and loan officer will answer any questions you have and work towards a smooth transaction, but it's up to you to make sure it's accurate.  

If I had to do it again, I would have been more inquisitive and comfortable with what questions to ask.  My transaction went very smoothly and I asked a lot of questions in the process but there's always room for improvement.  A lot of my "lessons learned" afterward weren't from mistakes I made but a desire to be slightly more involved.  We all have responsibilities to juggle.  Make the closing process your top priority and leave no room for "would have, could have, should have’s.”  

Be Patient and don't get stressed

There are a lot of moving parts and details to get bogged down in during closing.  Remember to keep your eye on the prize.  I knew owning a home was an investment of time but I underestimated how much time it took, especially the closing.  Learn from me.  Don't take on too much responsibility during the process.  Some things are unavoidable but try to limit the distractions until the home is your home.  

My transaction went very smoothly.  And don't get discouraged if you hit a few bumps in the road.  The valuation came back lower than the list price, negotiations are at a standstill, the seller won't budge on something you requested, one or more of these things can happen during closing. These are opportunities to negotiate, not a reason to immediately back out.  

Stay vigilant, read everything, and follow your agent's advice.  Most importantly - remain patient and optimistic throughout the process.  Closing is not as confusing or scary as it may seem.