The Closing Process Explained

While buying a home can be one of the most exhilarating and rewarding experiences a person can have, the litany of rules, regulations and processes to obtain a home can wear down even the savviest purchaser. How do you stay on top of everything AND keep your sanity? It all starts with quality information. Our website, www.championstitleservies.com has tons of resources to help make your home buying experience a pleasant one. Though we cannot cover all the information in today’s post, we will go over one of the most important aspects of any home purchase: the closing.

What is a closing?

A closing is defined as “a meeting of all parties involved in a property transaction during which pertinent documents are signed and transferred, and funds are distributed.” If that definition is a little too technical, it basically means that everyone involved in selling the home (buyer, seller, real estate agent, title company, attorney, etc) needs to attend a short meeting to make sure everything that needs to happen, happens accurately and legally. Typically, it is handled by a closing agent, either a title insurance company or an attorney, and will last approximately 45 to 60 minutes.

When does your closing process begin?

The closing agent will begin preparation for your closing shortly after you sign your contract.

What information does the closing agent obtain?

A request for payoff information is sent for existing mortgages, as well as a request for any information regarding homeowners or condominium association dues and/or transfer fees.

If a new mortgage is being obtained, the closing agent will work closely with the new lender to make sure that all of the lender’s closing requirements are met.

A title exam is ordered to verify the seller’s right to transfer ownership, and to discover any outstanding mortgages, liens, restrictions, easements, etc., which may affect the property. A title commitment will then be issued to show any matters reflected in the title exam, as well as a determination of the documents needed to properly transfer the title of the property to the buyer.

Who else other than the closing agent works on this process?

The closing agent will also work closely with the lender and Realtors to coordinate the ordering of the termite inspection, survey, homeowner’s insurance and flood insurance, if applicable.

What happens after the buyer receives the required documents and the loan is approved?

When the lender has received all required documents from the buyer and the loan has been approved, the closing agent will schedule the date and time for the closing with all parties. The lender will prepare a closing package consisting of the loan closing instructions, fees charged in connection with the new loan, and any loan documents to be delivered to the closing agent. The closing agent will then prepare all of the necessary closing documents, including a closing statement outlining all costs associated with the transfer of ownership as well as fees charged in connection with the new loan.

Copies of the closing statement are usually faxed to the lender and Realtors, if any. If the closing agent has been provided a fax number for buyer and/or seller, they may also receive a copy.

What does the buyer need to bring to the closing?

The buyer must bring a cashier’s check to closing made payable to whatever title company was hired.

Where does the closing take place?

The closing typically takes place in the closing agent’s office.

What are the final steps?

The closing agent, buyer, seller and any Realtors sit around a table together while the closing agent explains the closing statement as well as other closing documents. When all of the documents have been signed, including the deed, and the buyer has given the cashier’s check to the closing agent, the seller receives his or her proceeds from the sale.

After the closing, the closing agent sends the original deed and mortgage to the courthouse for recording. The completed loan package is sent to the lender. All remaining funds are disbursed according to the settlement statement, including mortgage payoffs. The owner’s and lender’s title policies are issued when the deed and mortgage are returned to the closing agent after recording.