Definitions
Understanding these key terms will help you get the most out of this guide.
Possession Date
The possession date is the day you take ownership of your new home and gain the right to occupy it. The delivery date your Sales Counselor gives you is always approximate; Classic cannot guarantee it, because many factors affect the time it takes to build a home.
Many closing tasks are timed relative to possession: utilities should be transferred into your name as of the date of closing, and the condition of curbs, sidewalks, and streets is documented at the time you take ownership. Keys are delivered only after documents are finalized and funding is confirmed.
Welcome Home Orientation
The Welcome Home Orientation is a meeting held at your new home, typically lasting 1.5 to 2 hours. During it, the builder reviews work completed since the New Home Presentation, documents any remaining items and expected scheduling, demonstrates how the home operates, and reviews key points about maintenance and limited warranty coverage.
Your Project Superintendent and Customer Service Representative escort you through the home, demonstrating its features and quality components and providing maintenance suggestions. A sixty (60) day Customer Service appointment is scheduled at this meeting. Only the cosmetic items listed on the Welcome Home Orientation Form will be corrected or resolved.
New Home Presentation
The New Home Presentation is a walkthrough that takes place before the Welcome Home Orientation, during which items needing attention are noted. The construction team is responsible for resolving these items, most of which can be completed before move-in.
When parts must be ordered or specialty trades are needed, items are typically resolved within 30 days unless other scheduling is communicated. Any items still outstanding at your Welcome Home Orientation are documented on the meeting agenda.
Closing Appointment
The closing appointment is the meeting at which ownership of your new home is transferred to you. It takes place at the builder's corporate office, typically lasts about one hour, and is available Monday through Friday between 10:00 a.m. and 3:00 p.m. Attendees include the closing agent, the Purchasers, and a real estate agent if applicable.
At the appointment you sign final documents, make your final payment, and — if all details are finalized — receive the keys to your new home. You should arrive having arranged homeowner insurance, transferred utilities, confirmed your financing with your lender, and obtained certified or wired funds for the final number.
Final Number
The "final number" is the final cost figure you pay at closing. It is usually not available until the final days before the scheduled closing. Although a reasonably close estimate may be determined prior to the date of closing, several of the items included in the final total are subject to last minute adjustments.
When paying by certified check, the check should be made out to the title company in the amount of the final number.
Proration
Proration is the process of splitting customary recurring costs to the date of closing so each party pays only for their share of the period. Items such as prepaid expenses, lender or HOA reserves, general real property taxes, and applicable assessments are prorated at closing.
Prorations of property taxes and assessments are based on the current year's taxes and assessments or, if those are unavailable, on the prior year's figures. Because proration depends on the closing date, the final cost cannot be fully calculated until that date is known.
Certified Funds
Certified funds are guaranteed payments, typically a certified check, brought to closing to cover the final number. A certified check should be made out to the title company in the amount of the final number.
Any closing that is not funded with a mortgage must use wired funds; in those cases a certified check will delay the closing. Allow enough time in advance to arrange for and obtain these funds.
Wired Funds
Wired funds are payments transferred electronically rather than by check. You should plan to bring either a wire or certified funds to closing.
Any closing that is not funded with a mortgage must use wired funds — a certified check will delay such a closing. Arrange and transfer funds sufficiently in advance to allow for processing.
General Warranty Deed
The general warranty deed is the document that conveys the home and lot to you. It transfers ownership subject only to permitted exceptions.
It is one of the legal documents you receive at closing and should be stored in a safe place, as you will need it for tax purposes and when you refinance or sell your home.
Title Commitment
The title commitment is a standard American Land Title Association (ALTA) owner's title insurance commitment delivered at or before closing. It commits the title insurance company to insure salable title to your home in the amount of the purchase price, subject to the permitted title exceptions described in the purchase agreement.
What you see on the day of closing is the commitment to issue the policy; the title insurance company mails the actual policy in the weeks following closing. Review the title commitment carefully and discuss any questions with your title company.
Title Insurance
Title insurance protects against defects in the ownership history, or title, of your home. An owner's policy insures salable title to you in the amount of the purchase price, while lenders separately require title insurance in the amount of the mortgage to protect themselves in case the title search missed anything.
At closing you receive a commitment to issue the policy; the title insurance company mails the actual policy in the weeks afterward. Keep it in a safe place with your other important papers.
American Land Title Association (ALTA)
The American Land Title Association (ALTA) is a national organization whose standardized forms are widely used in real estate title insurance.
At or before closing you receive a standard ALTA owner's title insurance commitment to insure salable title to your home in the amount of the purchase price.
Title Company
The title company handles the title insurance and much of the paperwork involved in your closing. You can expect correspondence from your title company, and the actual title insurance policy is mailed by the title insurance company in the weeks after closing.
In preparing for closing, your agent forwards evidence of insurance to your lender and the title company, and any certified check is made out to the title company in the amount of the final number. Review the title commitment carefully and discuss any questions with the title company.
Promissory Note
The promissory note is a document from you, payable to the lender, in the principal amount of the loan plus interest. It represents your legal promise to repay the money you borrowed.
One-twelfth of your annual taxes and homeowner's insurance is added to the principal-and-interest payment to determine your total monthly payment. The promissory note is among the documents you should store safely after closing.
Deed of Trust
The deed of trust encumbers your home as security for repayment of the promissory note. In effect, it pledges the property as collateral for the loan.
It is one of the legal closing documents you should keep in a safe place, as you will need it when you refinance or sell your home.
Covenants, Conditions, and Restrictions (CC&Rs)
Covenants, conditions, and restrictions are the recorded rules of your homeowners association that govern how owners may use and maintain their property. You received these — along with the association bylaws and articles of incorporation — when you wrote your purchase agreement, and at closing you sign a disclosure confirming receipt.
Classic recommends reading these documents carefully, as their provisions will be enforced. Access is available from your community Homeowners Association.