Closing
Closing is known by many names. For instance, in some areas, closing is called settlement and transfer. In some parts of the country, the parties in the transaction sit around a table and exchange copies of documents, a process known as passing papers (“We passed papers on the new house Wednesday morning”). In other regions, the buyer and the seller never meet; the paperwork is handled by an escrow agent in a process known as closing escrow (“We’ll close escrow on our house next week”). The main concerns are that the buyer receives marketable title and that the seller receives the purchase price.
Face-to-face closings may be held at the office of the title company, the lending institution, an attorney for one of the parties, the broker, the county recorder, or the escrow company. Those attending a closing may include:
- the buyer
- the seller
- the real estate salespersons or brokers (both the buyer’s and the seller’s agents)
- the seller’s and the buyer’s attorneys
- representatives of the lending institutions involved with the buyer’s new mortgage loan, the buyer’s assumption of the seller’s existing loan, or the seller’s payoff of an existing loan; and
- a representative of the title insurance company.
Closing agent or closing officer
A closing officer may be the attorney of the buyer or the seller, a real estate broker, or a representative of the lender or the title company. Some title companies and law firms employ paralegal assistants who conduct closings for their firms.
The closing officer orders and reviews the title insurance policy or title certificate, surveys, property insurance policies, and other items. After reviewing the agreement of sale aka purchase agreement, the agent prepares a closing statement indicating the division of income and expenses between the parties. Finally, the time and place of closing must be arranged.
The exchange
The exchange is made when the parties are satisfied that everything is in order. The seller delivers the signed deed to the buyer, who accepts it. All pertinent documents are then recorded in the correct order to ensure continuity of title. For instance, if the seller pays off an existing loan and the buyer obtains a new loan, the seller’s satisfaction of mortgage must be recorded before the seller’s deed to the buyer. Because the buyer cannot pledge the property as security for the new loan until ownership has been transferred, the buyer’s new mortgage or deed of trust is recorded after the deed.
final walk through- verifying condition
In the real estate contract, the buyer usually reserves the right to make a final inspection, often called a walk-through, shortly before the closing takes place. Accompanied by your agent, the buyer verifies that necessary repairs have been made, the property has been well maintained, all fixtures are in place, and no unauthorized removal or alteration of any part of the improvements has taken place. It is not an opportunity to reopen negotiations.
Don’t say I did not warn you! At the closing you’ll need to sign a lot of paperwork and we will pay attention and take our time to go over each page and read everything carefully. Seller will also have to sign some documents. After you finish signing all the papers, the escrow officer will prepare a new deed claiming you as the homeowner and forward the deed to the county recorder. You will then deposit a cashier’s check or set up wire transfer for the remaining down payment (this may be covered by your earnest money deposit already), as well as the closing costs (your agent should provide you an estimate earlier so no surprises there), and your lender will transfer your loan to escrow so the seller or seller’s lender can be compensated.
So when do you receive the keys to your future home?
Let’s say we satisfied below elements:
- Funding of your mortgage is complete
- The county or other local government branch recorded the deed (this could be the same day or weeks/ months depending on your state)
- Any extended seller possession has passed (if the seller requested some time to move after the closing. This is to protect themselves from a fallen deal last minute)
- If everything is ready and the closing is finalized before 3 PM. and it’s not a Friday, you’re likely to get the keys the very same day.
Time to enjoy your new home!
