Putting Together the Pieces:
a Primer on Investing in Your New Home
Step 8: Closing on the Property and Taking Possession of your New Home

WHAT IS A REAL ESTATE CLOSING?
A "closing" is where we meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you. The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records. At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check. Your agent or escrow officer will notify you of the exact amount at closing.

WHAT IS AN ESCROW ACCOUNT?
An escrow account is a neutral depository held by your lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment. When the bills fall due, the lender pays them from the special account. At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due.

CONGRATULATIONS!
You have closed on your new home and now you are ready to move! Think about your move as a series of small projects that you can begin while your home is under contract. Your move will progress as your contract and closing progress. That way, when the day comes to physically move your belongings, most of the details will be taken care of. Keep detailed records – some moving expenses are tax deductible! Keep detailed records of all moving expenses if your move is job related. Many expenses, including house-hunting trips, are tax deductible. If your move is 35 miles or more from your home, you can deduct your family’s travel expenses, including meals and lodging; the cost of transporting furniture, other household goods and personal belongings; food and hotel bills for up to 30 days in the new city if you have to wait to move into your new home; and the costs associated with selling your old home or leasing your new home. Note: There is a ceiling on deductions which is outlined in detail in the IRS’s Publication 521, “Tax Information on Moving Expenses,” available free from the IRS offices. We have several checklists available to help you prepare for you big day. Just click the Request button at the top of this page to ask for them.

Helping Children Cope with the Move

1. Show the children the new home and their new room prior to moving. If this is not possible, pictures or videos will help them visualize where they are going.

2. Assure children that you won’t forget their friends.

3. Make a scrapbook of the old home and neighborhood.

4. Throw a good-bye party. At the party, have their friends sign a t-shirt.

5. Have your children write good-bye letters and enclose their new address. You may wish to call the other children’s parents so that they will encourage return letters.

6. When packing, give your children their own boxes and let them decorate them.

7. Start a scrapbook for your new home.

8. Visit your children’s new school, park, church, etc… Take a camera.

9. Help your children invite new friends over to your new home.

10. Let your children choose a new favorite restaurant. This will help them feel in control of their new environment.

11. Encourage your children to send letters about their new home to their friends.

12. Involve your children in groups, sports, and activities like the ones they used to participate in.

13. Remember, even if you only lived in a home for a few years, to a young child it is nearly their entire lifetime.

Step 7       Index       Glossary