Settlement day is a day of great excitement and activity. It is the day legal ownership of the house transfers from seller to buyer and (unless there is agreement to the contrary) when the buyer gets possession of the home. In Virginia, settlements are conducted by settlement companies and are presided over by settlement agents (who may or may not be attorneys). In Northern Virginia, most sellers and buyers use the same settlement company and attend settlement at the same time.
The settlement company prepares the settlement sheet (HUD-1) which records all of the financial details of the sale. The HUD-1 shows each parties’ expenses, how much money a buyer needs to bring to settlement and the amount of proceeds a seller will receive at settlement. A draft of the HUD-1 should be provided to all parties usually a week before settlement and is a “working” document until settlement
Per the contract, you get the opportunity to do a walk through of the house prior to settlement. This may be only the second time you have seen the house since the home inspection. It is your chance to make sure the seller made any agreed upon repairs and that the house is in expected condition. Generally it’s a good idea to schedule the walk through as close to settlement as possible (usually the day of) to minimize the chance the condition of the house changed between the time of walk through and settlement. Any problems discovered during the walk through will be handled during settlement.
One decision you need to make at settlement is whether you want to purchase title insurance and if so, what type of policy. Prior to settlement, the title company will send you information explaining what title insurance is and the various options. It’s worth learning about title insurance so you can make an informed decision at settlement.
Settlement usually takes about an hour. In addition to signing a lot of documents, it is a great opportunity for you to ask the seller any questions you may have about the house or neighborhood. After any walk through issues are resolved, all the documents are signed and all monies have been handed over, the seller will hand over the keys and the house is yours. Congratulations!!