How Long Does it Take for Signing Home Buying Documents?
Question: How Long Does it Take for Signing Home Buying Documents?
A reader writes: "All of my friends are telling me that we will be signing away our life at the title company when we show up for our closing appointment to sign our home buying documents. My brother says his arm about fell off after signing all of his documents for home buying. What gives? What can we possibly sign that could take that long or be that involved? I asked my lender, and he said it should take 20 minutes. What's the real story? How long does it take for signing home buying documents? I'm feeling anxious now."
Answer: I can feel your trepidation over signing all of this paperwork for home buying. I'll be honest with you, it is a lot of paperwork. More paperwork than you've had to sign to buy anything else in your life. It's more paperwork than even home sellers have to sign. The paperwork required to sell a home is often much less than the documents a buyer must sign to purchase. It's an incredible amount of legal documents one must sign to buy a home.
Yet, there is no cause for concern. The biggest thing you need to worry about is that the paperwork you sign is accurate. Of course, if you are paying cash, the home buying paperwork is minimal, but most buyers finance the purchase of a home. It's the banks that require much of the home buying documents.
Signing the Not-So-Important Home Buying Documents
There will be a few legal documents that are very important and some that are not-so-important.
A grant deed is not one of those documents. A buyer does not sign the deed. This astonishes some buyers. Because if you buy a car, for example, you might sign a title document accepting ownership of the car. It's different when you're buying a home. The seller will sign the grant deed or warranty deed, not the buyer.
Other documents will be legal forms that might guarantee that you have not lied on any of the other documents you have signed. There could be various forms of this document as one document stating that you are telling the truth is often not enough for the bank's legal department. The legal forms will paraphrase and restate, and sometimes the documents are identical to the previous documents but a home buyer still must sign them.
Don't gripe. Don't complain. Don't refuse to sign. Just sign the documents or your closing will be delayed and / or even after complaining to the bank, you might informed that you can go elsewhere to get a mortgage if you don't like the documents.
You might also be asked to sign documents that say you have used different names or could have used different names if you had ever the forethought to have come up with the idea in the past. You might sign various forms of your signature, with an initial, without an initial, with your middle name spelled out, every kind of variation possible under the sun. Just sign it.
Don't be surprised if you are asked about the condition of the home and to rate it from excellent to good / average / fair or poor. You may need to sign an owner occupancy certification.
This is a document the bank can use to call your loan due and payable if you don't move into the property. Most of the documents are forms a buyer could be sued over or suffer consequences if the information provided by the buyer is untrue. Still, a buyer must sign all of those documents if the buyer wants the loan.
Signing the Important Home Buying Documents
I've worked with many lawyers who want to read every document. I don't blame them because it would be embarrassing for a lawyer to admit she signed a document without reading it. But many lawyers do not read all of the home buying documents. Home buyers who are lawyers generally do, however, read the following documents and scrutinize them for detail. As a home buyer, you should, too.
- The promissory note
Verify the following: Spelling of your name. The property address, including the ZIP code. The interest rate. The principal balance of the loan. Term to repay. Prepayment penalty, if any.
- The mortgage or deed of trust
Verify the following: Spelling of your name. The property address, including the ZIP code. The principal balance. Terms for acceleration or alienation.
- The Closing Statemnt
Verify the following: Spelling of your name. Name and address of lender. Property address. Settlement agent. Settlement date. Recording / closing date. Contract sales price. Amount of earnest money. Amount of new loan. All closing cost fees -- most important, the 800 fees, which are lender fees.
If you do not understand debits and credits, ask for an explanation until you are satisfied or your patience runs out, which first occurs. Many intelligent people, including those in the real estate profession, do not understand how to read a closing statement. They find debits and credits too confusing.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.