How to close on a condo

The closing is when you exchange your money for the title and deed that make you the official owner of the condo.

You and the seller will meet at a specific location — either the office of the title company, your agent or your lawyer. In some states, you can sign the documents remotely with the help of a notary who comes to your home.

Your agent will present you with the documents from the title company that you sign — usually with the signature line highlighted to speed things up. When the signatures are complete, you’ll get the keys to your new home.

Here's what you should know about the process:

What to do prior to closing day

Keep abreast of what's going on with your lender during underwriting so you can resolve any issues that arise. If the lender needs more documents, such as proof of home insurance, provide them as soon as possible. The faster you do, the quicker you can close.

Your lender must provide you with a closing disclosure form at least three days before closing. This document states the final details about your mortgage, including the loan terms, your projected monthly payments and your closing costs.

The three days allow you to ask the lender questions before closing. It also is time to review and compare the disclosure to the loan estimate you received from the lender shortly after your offer was accepted. Make sure none of the terms has changed. If one has, contact your agent and explain the issue.

During this time, you'll also want to do the walk-through of the property to double-check that all repairs have been made and ensure that everything is in order before you officially take possession of the home.

Pro tip: If you are submitting any information or money electronically, confirm the email and website address to ensure that you don't send money to a scammer masquerading as your loan officer or agent.

Why you may want to consider retaining a lawyer

During underwriting, the lender will review the condo documents. But it may not be a bad idea to have a second set of eyes looking at them on your behalf, said Harvey Jacobs, an attorney at Jacobs and Associates in Rockville, Maryland.

"Hire a competent, experienced real estate attorney familiar with the laws and conventions in the jurisdiction in which the condo is located and who can act promptly to advise the buyer of any pitfalls," Jacobs said.

For example, an attorney will look at the condo's policies to see whether pets are allowed or if there are any breed restrictions, he said.

They also look at whether the seller owns the parking spaces for the unit, is conveying them and whether the spaces are taxed. "If those taxes are delinquent, the parking space can be sold at a tax sale foreclosure auction."

Other issues: Can parking spaces be rented to someone else and are any separate storage spaces part of the sale and identified in the contract and deed? There also must be proof that a condo association has been notified of any change in ownership.

Attorneys also will study the HOA's board meeting minutes to see whether there are any potential problems such as a leaky roofs, old elevators and lack of updates to a dated fire suppression system, Jacobs said. Those could cost significant funds in the future.

Another red flag is if too many owners are overdue on their condo fees. This could jeopardize the financing for buying the unit.

All jurisdictions allow the buyer to cancel the contract for a period of days after getting the condo documents, he said. "It is essential that the documents are reviewed in time to allow the buyer to cancel the contract if the documents reveal adverse terms or conditions," he said.

What to do on and after closing day

At closing, you will meet in person or virtually with your agent, the attorney advising you on the deal (if you have one) and the seller and seller’s agent to exchange money for the deed to the condo.

Make sure to bring a government-issued photo identification card such as a driver’s license. You’ll also need to bring a cashier’s check or wire transfer for the down payment and closing costs, which are typically 2%- to 7% of the purchase price.

There are several documents your attorney or title or escrow company representative will review with you at closing:

Estoppel certificate, which confirms that the seller has paid the HOA fees in full
Deed of trust
Deed
Proof of homeowner’s insurance
Loan application
Promissory note, which is a binding agreement that the buyer will repay the loan on the property. It states information on the loan, including the loan amount, interest rate and number of payments.
Initial escrow statement
Certificate of occupancy
Title documents: title insurance commitment, affidavit of title and transfer tax document

After closing, you can submit a change of address form with the post office online. You also should update your address with any online shopping sites like Amazon to make sure an order isn’t sent to your old address. Stop by your local department of motor vehicles to update the address on your driver’s license. Update your address with other significant entities such as utilities and the bank where you have an account.

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