What actually happens at a closing? The seller and buyer, flanked by lawyers and other representatives, meet with the real estate agent, mortgage lender and title company to sign the mounds of paperwork involved in transferring the property and finalizing the buyer's financing. Closing papers include the deed, mortgage, numerous tax receipts, a Certificate of Occupancy and other documents. This meeting, held at the office of the closing officer (either the lender, the title company, an attorney, or a broker), typically takes under an hour, if each person comes prepared and the paperwork is in order. The last steps include the disbursement of funds to the seller for the purchase price of the property, and the presentation of the keys to the buyer. The buyer may also receive a refund of overpayment of closing costs, which had been paid out of the deposit check.

If you are unable to attend the closing, you can often review and sign the paperwork before closing. Signed papers, which often have to be notarized or witnessed, can be mailed to the closing officer.

From the acceptance of the offer, many progressive steps lead to the day of final settlement. First, a closing date would have been set, typically for 60 days from the date of the sale agreement. Of course, there's some flexibility. Occasionally a closing can be delayed due to unfinished work on a new home, paperwork snags, or incomplete title work.

In the meantime, the title company conducts a title search and verifies that the seller holds the title and that no liens are held against the property. If any obstacles or other conditions materialize that could undermine the sale of the property, the sellers’ attorney will work with the seller so the title will be clear by the closing.

After the home inspection and submission and approval of the buyer's loan application, the buyer conducts the final walk-through, typically within a three days of the closing. This is your last opportunity to verify the condition of the property and that it meets your expectations. Check that the house has been left in broom-swept condition, that all systems work and that the sellers cleared out debris and not-so-obvious objects-greasy gadgets in the garage and shed or stuff stored in the attic. As you walk through the house, try everything-appliances, faucets, toilets, light switches. Check that the seller has left what you agreed to (e.g. washer/dryer, blinds) and that repairs have been made. If what you see falls short of the contract, don't be afraid to renegotiate the price.

What can you do to avoid dollar shock at the closing? Your lender should send you an estimate of costs early on in the process. In general, costs can range as high as 6% of the loan amount (without considering discount points or broker's commission). Closing costs vary depending on your state of residency, the closing date, financing arrangements, and the lender's requirements. Your attorney will give you exact costs a day or two before closing.

A word of caution: Prior to closing, lenders sometimes run another credit check. Don't do anything to jeopardize your position. From the time you enter into a sale agreement, refrain from buying big-ticket items. And don't take out a loan or charge large purchase on your credit cards. In fact, don’t make any big-ticket purchases before you buy since they can greatly affect the amount of the mortgage for which you will qualify.

Mike Cromie of Prudential Properties Northwest I, Palatine, can be reached at 847-705-6500. Mike Yeats of Prudential Properties Northwest, Arlington Heights, can be reached at 847-398-4600.