9.
Closing
Go to any local courthouse and you
can find property records detailing real estate ownership in
your community -- sometimes records that date back hundreds
of years.
These records are important because
they provide today's owners with proof that they have good,
marketable and insurable title to the property they are
selling. Equally important, such records enable buyers to
provide proof of ownership when they sell. The closing process, which in
different parts of the country is also known as
"settlement" or "escrow," is
increasingly computerized and automated. In many cases,
buyers and sellers don't need to attend a specific event;
signed paperwork can be sent to the closing agent via
overnight delivery.
In practice, closings bring together
a variety of parties who are part of the
"transaction" process. For example, while the
history of property ownership has been checked, it's
possible that the records contain errors, unrecorded claims
or flaws in the review itself, thus title insurance is
necessary. At closing, transfer taxes must be paid and other
claims must also be settled (including closing costs, legal
fees and adjustments). In most transactions, the closing
agent also completes the paperwork needed to record the
loan.
What
to expect. Whatever the case, the result is
that title to the property is transferred from seller to
buyer. The buyer receives the keys and the seller receives
payment for the home. From the amount credited to the
seller, the closing agent subtracts money to pay off the
existing mortgage and other transaction costs. Deeds, loan
papers, and other documents are prepared, signed and filed
with local property record offices. Before closing, buyers typically
have a final opportunity to walk through the property to
assure that its condition has not materially changed since
the sale agreement was signed. At closing itself, all papers
have been prepared by closing agents, title companies,
lenders and lawyers. This paperwork reflects the sale
agreement and allows all parties to the transaction to
verify their interests. For instance, buyers get the title
to the property, lenders have their loans recorded in the
public records and state governments collect their transfer
taxes.
Settlement is a
brief process where all of the necessary paperwork needed to
complete the transaction is signed. Closing is typically
held in an office setting, sometimes with both buyer and
seller at the same table, sometimes with each party
completing their papers separately.
What you need to do.
One of the best
parts of settlement is that buyers and sellers need to do
very little.