What Do You Mean I Don’t Get My Keys At Closing?

by Paul Slaybaugh | Jan 10, 2010 | Home Buying

It’s true.  In Arizona, you will rarely get the keys to your new home at the closing table.  Despite the fact that you wired in the balance of your down payment funds or marched a cashier’s check into the title company on what you thought was the penultimate day, the home is not yet yours.  You see, unlike other parts of the country where all parties congregate around the closing table to officially finalize the escrow process, there are still a few remnants of hanging fire that must be doused before your new home is officially, well,  your new home.

If you relocated from back East, you may be surprised to find the title officer and your agent (hopefully he/she is in attendance) as your only companions at signing.  Buyers and sellers typically have separate signing appointments, so if your loan documents arrived at the title company three full days prior to the scheduled closing date, as stipulated in the boiler plate of the standard Arizona Association of Realtors contract, you might actually execute your portion of the documents before the seller does.  Until both parties sign their respective closing docs, the property cannot be transferred.  Even if the seller has signed off prior to your appointment, however, there are a few additional factors that preclude you from taking immediate possession of the property.

The closing appointment at which the buyer signs the loan documents is not technically the “closing” because of a few missing components.  Most important among them are the funds from the lender.  While you may have already brought in the balance of the funds required of you (down payment and closing costs), most lenders do not release their funds until they receive and review the loan documents that you sign at your closing appointment.  Some lenders will “table fund,” meaning they will release the wire to the title company without review of the documents, but that is atypical.  Needless to say, until the money from your lender hits the title company’s coffers, the moving truck you have scheduled is going to have to keep circling the block.  From the time of your signing, it will usually take 24-48 hours for the lender to fund the loan.  This, of course, assumes that there are no problems or discrepancies found in their review of the signed documents.

Okay, so you signed your documents, wired in your down payment and just learned that the lender has funded your loan on the scheduled day of closing.  Woohoo!  The house is finally yours!  Now where’s that key?  Not so fast.  Even though it is tantamount to a rubber stamp, the title company still has to submit the deed to the county for recording.  This is an automated process these days and is done en masse, but the home is not yours until we receive confirmation that the deed has been recorded.  It is then, several days after you signed the paperwork and deposited your money that your Realtor shows up with your keys and a thousand watt smile.

The thing to keep in mind when considering the logistics involved in closing is that you will have nothing to do on the actual close of escrow date.  The signing of documents and deposit of monies, if handled correctly, will be done in advance.  Keep this in mind when discussing closing dates with your agent as part of the initial negotiation, as miscommunication (we agents sometimes forget that people don’t understand all of the minutia involved in the sale of property) might lead you to take the wrong day off work or schedule the movers incorrectly.  Plan on being physically available two to three days prior to the agreed upon closing date (as it is stated in the contract) to do your part.  Some people schedule the movers for the closing date, but this is a mistake.  Because the home is not yours until it records, and there is no way to know whether it will record at 9 in the morning or 5 at night, you will save yourself a lot of potential misery by scheduling the truck a day or two later.  With the recent delays that have been caused in many transactions by various, and dare I say, draconian changes within the lending industry, a little buffer is advisable.

Now that you have a handle on the closing process, we’ll backtrack a bit in the next installment of the Scottsdale Property Shop home buying series as we take a closer look at the inspection process in, “They Have to Fix That, Right?”