Home Economics: What to expect at your house closing

So many documents, so few being read carefully or even at all, sums up the typical closing of a house sale for a large number of buyers, real estate agents say.

"I have not seen a buyer read every document at closing since the mortgage and title industry went beyond four pages," said John Duffy, president of Duffy Real Estate on the Main Line.

"If the lender, agent, and title agents are doing their jobs, they should paraphrase each page and ask the buyers if they have questions."

These documents provide critical information about the transaction that, in many cases, comes as a complete surprise to consumers.

Residential real estate sales involve a lot of paper, as Duffy said, and today's exercise is designed to offer insight in what you need to read and why it is important to you.

So far, you've found a real estate agent who, at first meeting, has given an agency disclosure form, required by law, to reveal his or her business relationships.

You've found a house and been given a seller's disclosure form of problems and notices about lead-based paint and other hazards, depending on the state regulations.

You've signed an agreement of sale and received a home inspection and termite inspection, and you have a mortgage agreement in hand and homeowner's insurance lined up. You've handed over earnest money deposited in an escrow account and received a good-faith estimate of closing costs.

Not necessarily in that order, but all the pre-closing documents and forms are in hand, and you are awaiting settlement day.

You and yours take off work and go to the real estate broker's office, where the person presiding at the closing - title insurance representative or lawyer, depending on the protocol - starts handing you papers to sign. These are documents common to most settlements. Special situations, such as an unusual loan arrangement, or regulations specific to a state or municipality may add to the list.

There are two closings - one for the loan, the other the house. Since you can't have one without the other, first the mortgage documents:

The truth-in-lending statement, which discloses the interest rate, the annual percentage rate, the amount of the purchase price you are financing, and the total cost of the loan over its life - 15, 20, 30 years. Make sure that what is in the statement and what you have been told, or think you've been told, are in agreement.