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THE CLOSING PROCESS

ABOUT THE CLOSING PROCESS

Your Choice of Closing Companies

You've found the perfect home, the terms have been agreed upon, the contract has been signed, you've chosen a lender and made application for your loan.

Now it's time for the title request to go to the title and closing company. Most lenders will ask if you have a preference for a particular company. This is a search at the County Registry of Deeds for documentation of ownership of the property being conveyed and any liens outstanding against the property, such as mortgages.

The title company will also be performing the closing. They co-ordinate paying off any outstanding liens, tax pro-rations, and calculate how much you will receive or need to bring to the closing.

The following is information to help you understand this process.

What Happens Next?

1. When the Title Company receives a title request, a file is immediately opened. Acknowledgement letters are mailed or e-mailed to you, your agent, your lender, the seller and the seller's agent. These letters are to let all parties know the order has been received, who your contact at the Title Company will be and the documentation that you and the seller will be required to obtain on or before the closing.

2. The Title Companies Title Search Department will conduct a search of the Public Records to determine who owns the property, who has liens on it and if there are restrictions on how the property can be used by the owner. From this report, the Title Company will determine what is required to clear the title so that the lender will obtain an insurable interest in the property. As the purchaser, you will receive marketable title through the purchase of an Owner's Title Policy.

3. If required by your lender, the Title Company will order a Mortgage Survey Inspection from a licensed surveyor/engineer. When the Title Company receives the drawing, they review it to determine that all improvements, including buildings and fences, are within the boundary lines and there are no encroachments for set-back lines or easements.

4. A payoff of the seller's existing mortgage will be ordered from their current lender to be collected at closing along with payment of property taxes and any other liens that may appear on the title search in order to clear the title.

5. The Title Company will prepare a Commitment for Title Insurance from information shown on the title search and fax or e-mail to the lender for their review. The commitment will provide them with pertinent information including the current title holder, a correct legal description of the property, any and all easements and restrictions, and a summary of what is required to transfer title. These requirements typically include the execution of a Warranty Deed, the payoff and release of any liens or judgments, and the payment of property taxes.

6. Upon approval of the loan, the lender will notify the settlement coordinator assigned to your file and the Title Company will coordinate with you and your agents for a convenient closing date and time. The lender will overnight or e-mail their loan closing paperwork to the title company and they will prepare the remaining documents necessary to complete the package to be executed by all the parties.

7. The day of the closing has arrived and all parties meet at one of the Title Companies offices to sign the paperwork and transfer the keys. A closing associate will meet with you and your real estate agent. He or she will provide explanations of the documents you will be required to sign and will insure that all the terms of the contract have been met and all of your requirements have been met. After all signatures have been obtained and all requirements are met, the funds for your final amount of closing costs and down payment will be collected. Net proceeds to the sellers and commissions will be disbursed and keys are turned over.

8. After the closing, the Title Company will disburse the remaining funds to the designated parties for the charges collected on the Settlement Statement, send the original loan closing package back to the lender, and record the appropriate documents such as the Warranty Deed and Mortgage Deed. After the documents have been recorded, we will issue Title Insurance Policies. The original Warranty Deed and Owners Title Policy will be mailed to you. The original Mortgage Deed and the Mortgage Title Policy will be sent to the lender. This completes "The Closing Process.

What's expected of the buyer on or before closing?

Homeowners' Insurance

You will need to obtain a homeowner's insurance policy for the property you are purchasing. Your lender requires this insurance. The agent of your choice needs to call the Title Company with information regarding your new policy as quickly as possible. This information is essential for the title company to prepare the final closing figures.

Cashier's Check

A cashier's check is required for any final closing cost amounts over $500 and should be payable to the Title Company.

Identification

At closing, you will be asked for a copy of your Driver's License, or some other form of identification that includes your picture and signature.

Contractual Obligations

The sales contract should contain all agreements between the buyer and seller and must be signed. Any changes must be initialed by both parties. The Title Company will prepare and conduct your closing only according to the terms agreed upon in your contract. If you have any questions about any item in your contract, please discuss this with your real estate agent. If possible, it is always best to get any issues resolved before getting to the closing table.

Miscellaneous

If you or anyone that is a part of your transaction will not be available to attend the closing, you must notify your lender and the Title Company at least 3 business days prior to closing. The absent person will be required to execute a "Specific Power of Attorney" to appoint someone to sign on his or her behalf to permit the closing to continue without that person being present. This procedure will also require the approval of your lender. If you or anyone that is part of your transaction is in the process of bankruptcy, divorce or any other court proceedings, you must notify your lender and the Title Company as soon as possible. These issues could take time to resolve and need to be handled prior to closing.

Visit our website for Real Estate Information: www.reinnh.com

 

Published Thursday, April 26, 2007 10:21 PM by Tim Wade

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