These seven easy steps will put you on the path toward a successful real estate closing.
Step One – When and Where is the Closing?
Communicate with your lender, real estate agent and/or title company about the timing of the real property closing (the “Closing”). Verify the actual date and location of the Closing. The closing may occur at the title company, a real estate agent’s office or at an attorney’s office. Arrive at the Closing on time!
Step Two – Bring Identification and Good Funds to the Closing.
Bring a valid government issued photo identification card to the Closing. Some lenders may require a second form of photo identification with your legal name on it. Ask some questions about identification prior to arriving at the Closing. Generally, the title company will require the parties to tender good funds to the Closing. That means you need to bring a cashier’s check or arrange for a wire transfer. Do not bring a personal check to the Closing. Sometimes, fees and expense can change prior to the Closing. Ask questions and be proactive about the amount of funds needed at the Closing.
Step Three – Review the Settlement Statement (HUD-1) before the Closing.
Before the Closing, request a copy of the preliminary Settlement Statement (HUD-1) from the title company or the lender. Carefully review the settlement charges, the totals, and amounts necessary to close the transaction. All fees and expenses should listed on the Settlement Statement. Examine the Settlement Statement for errors and completeness. If the Settlement Statement contains errors, or if you have questions about the content, contact the title company, agent, broker, attorney, or lender.
Step Four – Bring Your Documents to the Closing.
At the Closing, make sure that you arrive with copies of the real estate contract, Settlement Statement, and any other documents that you have received prior to Closing. It is always a good idea to compare the documents that you receive prior to Closing with the documents that you are expected to execute at the Closing. (Generally, you will not see the loan documents until the day of the Closing). If any of the documents have changed, ask for clarification regarding the necessity for the change.
Step Five – Review the Documents Prior to Execution.
You will be expected to execute multiple documents at the Closing. Spend some time reading what you are signing. It is important to check for errors and modifications contained in loan documents, title documents and affidavits. Verify that names are spelled correctly and that the property address is correct. Verify that the mortgage interest rate is correct and the loan amount is accurate. Don’t let a typographical or material error cause you future problems because you failed to read the documents at the Closing.
Step Six – Obtain a Copy of the Documents.
After you have finished executing the documents at the Closing, ask for a copy of everything that you signed. Often, the title company will provide you with a thumb drive containing a digital copy of the documents or a paper copy of the documents. Make sure that the signatures of the buyer and the seller appear in your copy of the documents. If a party is required to execute the Closing documents at a later date, make sure that you receive the signature(s) so that you can add the additional signatures to your copy. Finally, verify that the title company has your address in case additional documents are sent for your signature.
Step Seven – Documents Received After Closing.
After the Closing, the county clerk will record the title documents executed at the Closing. The recordation process may take a few weeks. After recordation, the buyer should receive a copy of the recorded warranty deed, recorded deed of trust, title insurance policy, and an owner’s insurance policy. After recordation, the seller will receive a release of lien and evidence of the payoff of the loan from the former lender. You should calendar the date on which you expect to receive these items after recordation.
This article is for informational purposes only and is not intended to be a substitute for legal advice. Specific questions and circumstances regarding the issues addressed in this article should be individually discussed with legal counsel.
Adams, Lynch & Loftin, P.C.