The process to get from contract to the closing table is full of twists and turns and high emotions. This post is going to dive into the nuances between being “cleared to close” and actually being ready to close. I’m big on not over promising and under delivering, and assuring that proper expectations are set from the giddy-up in every transaction. I will lay out what is needed to be “ready to close,” as that is what is far more valuable to everyone involved than just simply the “clear to close.”
Each party in the closing process has milestones that they need to meet to assure that closing is ready to go. For the lender, that is being “cleared to close.” Cleared to close from the lending perspective is your underwriting is complete, and there are no further requirements for your loan to be approved. This is a HUGE milestone. It is great news and should always be celebrated. The lender is going to tell everyone who will listen. As such, as soon as that clear to close is issued, I start getting phone calls. It is then expected that closing is ready to go. But that is unfortunately far from the truth. Your clear to close could come a few weeks prior to closing, a few days prior to closing, or in unfortunate circumstances a day or so after you were originally supposed to close. That being said, getting from clear to close to the closing table takes a few more steps.
As the closing attorney, I like to think we steer the ship. The seller side has a number of things they need to accomplish, same with the buyer side, my office regarding title, as well as the lender. What we do is gather that information, and “balance” it all together. To be ready to close, a lot of boxes need checked in addition to just the loan being approved.
Even with the loan cleared to close, and all of our information received and gathered from the buyer and seller, we’re still not ready to go. Once a loan is cleared to close, your loan goes through processing to a closing department. The closer on the loan is different than anyone you’ve probably dealt with up until this point in the loan process. They also sometimes work in a different state, and time zone. This person also isn’t typically assigned to your loan until the last minute, and acts like the Great and Powerful Oz (joking). I wish I didn’t have to say it sometimes feels like we need to answer 3 riddles to get to this person, but it’s painfully true. This person is the holder of the closing instructions, which is what we as the attorney need in order to do what we refer to as “balance your CD.” This is when we take all our numbers, your loan figures, and balance them together to shoot out to everyone the final closing statement. As the borrower, you’ll see multiple preliminary closing statements from the lender. We as the attorney aren’t privy to those. I typically do not see your lender fees until I get your closing instructions. In a perfect world, I’ll get those 3-5 days prior to closing. More realistically, I don’t get them until 1-3 days prior to closing. Once the closing statement is final and approved, that is when the lender then sends me the closing package. The closing package is everything you sign at your closing appointment. So essentially, to be “ready to close,” we need your final approved balanced closing statement, the loan package, all invoices (seller payoffs, HOA/inspection/repair/insurance invoices, etc.), your money, as well as the loan funds.
Now that I’ve said “close” 102 times in this post and made your eyes cross, I’ve subconsciously made it so you’ll never want to close anywhere else! We’ve seen it all here at
Jackson Law; the good, the bad, and the ugly when it comes to what is needed to finally get to the table and be “ready to close.” I assure you that with us steering the ship, you can Rest Easy!