Take your seat in a crowded room. Closings typically take place in an office environment to allow for all the document signing, but in order to better accomondate your schedule Sentry Title can close at the place or time of your choosing.
You and the seller will be doing all the signing, but other participants on hand may include:
- Your real estate agent
- Seller's real estate agent
- Mortgage loan officer
- Closing agent
The closing agent:
- Looks over the purchase contract
- figures out what payments are owed and by whom
- prepares documents for the closing
- conducts the closing
- makes sure taxes, title searches, real estate commissions and other closing costs are paid
- ensures that the buyer's title is recorded
- ensures that the seller is paid.
Long-distance closings. Electronic fund transfers, fax machines and overnight couriers are making it more and more common to conduct closings from across the state or across the country. In such cases, the closing agent will come to your home or office to sign the paperwork. When the closing agent receives everything in good order, he or she proclaims the closing official.
Orderly conduct. Closing is mainly about wrapping up the details of processes that were started many days or weeks before. The ultimate goal is simply a "transfer of title," or transfer of ownership. A lot of paperwork needs to be processed simultaneously in order for the lender to give you the loan, the seller to be paid, and you to walk away a homeowner. As you're wading through a seemingly endless pile of paperwork, it's impossible to read every word of everything you're signing. If you tried, your closing would take a week! That's why you need the peace of mind a qualified real estate closing agent brings to closing day. He or she knows what it all means and what it all means to you. Squaring the deal. Before the title actually changes hands, though, there is some financial housekeeping to make things fair between you and the seller.
This involves all the miscellaneous, ongoing expenses of homeownership:
- Property taxes
- Sewer assessments
- Fire district taxes
- Common expense assessments (for condominiums or homeowners associations)
Some of the above expenses are paid in advance, so you'll have to compensate the seller for the items that have been prepaid and extend into your ownership. These expenses are generally prorated up to the day of closing.
Among the many documents you'll be signing at closing are:
- Mortgage note. The promissory note that's secured by a mortgage; it's your personal promise to pay back the loan.
- Mortgage. Similar to the "trust deed" or "deed of trust" used in other states, mortgage in this sense refers to the document that places a claim on property held by the lender as a security for the money borrowed.
- Closing statement. Also called "HUD-1 settlement statement," this is a full list of all the costs involved in the closing, from your earnest money and the expense adjustments to the closing costs, real estate agent's commission and the exact amount of the loan and the amount due to the seller.
- Buyer's funding check. The funding check from your lender may be payable to you or jointly to you and the closing agent; you'll have to endorse it over to the closing agent.
- You'll sign a variety of other forms required by the lender, such as documents making you promise that you've been honest with the lender about your financial status, that the home will be used for your primary residence, etc. Problem prevention.
If it all seems overwhelming, fear not. With a qualified real estate agent, mortgage company and non-biased non interested third party title agency helps ensure a smooth closing day.
The heart of closing day. "Transfer of title" moves ownership of the property from the seller to you.
The two events that make this happen are:
- Delivery of the buyer's funds. This is the check or wire funds provided by your lender in the amount of the loan.
- Delivery of the deed. A deed is the document that transfers ownership of real estate. The deed names the seller and buyer, gives a legal description of the property, and contains the (notarized) signatures of the seller and two witnesses. Depending on your particular situation, one type of deed may benefit you more than another.
- From hand to hand. Title to the property transfers to you when the seller places the deed into your hands. You don't leave with the deed instead, your closing agent will take it away to be recorded at the county clerk's office and it will be sent to you later. At this point, you'll leave the closing with a mountain of paperwork to file and the keys to your new home!