Home Closing Process
After choosing a home, the closing process starts. This article provides an overview of the closing process.
Step 1: Starting the Process
First thing’s first, a sales contract needs to be signed by the seller and the buyer and delivered to the closing agent. The escrow is accepted by the escrow agent, and the agent starts the closing process by opening a title order. Once the title order is opened, the file begins processing. Legal papers, such as tax information, loan payoffs, homeowner fees, inspections, hazard, and other insurances are ordered as well.
Step 2: Title Search and Examination
A title search is a search of public records. This includes deeds, mortgages, liens, will, divorce settlements and other documents that might affect the title of a property. A title examination is done after the title search and is a thorough examination of any documents that were found during the search. The examination helps to determine who the legal owner of the home is, and the debts that are owed on the property. After the title search and examination steps are completed, a title commitment report is prepared and sent out to all interested parties.
Step 3: Document Preparation
Before scheduling a closing, the closing agent reviews instructions and requirements from the lender, any instructions from other parties to the transaction, legal and loan documents. Then, the agent puts together a list of any charges that incurred, and prepares the closing statements.
Step 4: Closing
The closing is overseen by an escrow agent or settlement agent. During the closing, the seller will sign the deed and closing affidavit while the buyer will sign the new note and mortgage. Additionally, the old loan on the home will be paid off during the closing. Any other parties that are present at the closing, including the seller, real estate agent, and attorneys, will also be paid.
Make sure to bring all your paperwork to the closing. That includes proof of homeowner’s insurance, a copy of your contract with the seller, anything the bank may require to approve your loan, and a government issued photo ID.
Be prepared for your closing to have a few curveballs. Unfortunately, not everything always goes as planned. A document may be missing or a name might be misspelled. Make sure that you plan time for your closing to take longer than you expect just in case anything like this, or something else, happens.
Step 5: Post-closing
After the signing has been completed, the agent will forward payment to any prior lender, and pay all the parties who performed services directly involved with the closing process, if they have not already been paid; these transaction documents are recorded. Additionally, title insurance policies are prepared and sent to the new lender. The entire post-closing process is done without the involvement of the buyer or the seller.