• Jason Kern • Buying A Home

Ok, so you made it through the entire process. With your agent’s expertise you’ve seen several houses, narrowed down the selections, written an offer and negotiated terms, you’ve been through the due diligence and inspection period, you’ve gotten an appraisal and through your lender you’ve gotten the “clear to close” which means the underwriter or, the company that’s actually lending the money, is ready to move the funds into the title company’s account for disbursement at closing. Good words to hear!

At this point you’ll be hearing from your title company. Early in the process they’ll have received word via your broker that you’re under contract and that you’ve got a target close date. They’ll be working to pull all the information together. This will include the closing date, the purchase or contract price, any adjustments to the final price including possible refunds buyer’s closing costs, fuel and tax prorations and so forth. This will all be aggregated with any additional closing costs like title insurance, recording fees, wiring fees, etc, and entered into the final closing disclosure or CD. It’s a legal requirement that the buyer sees the document at least 2 days prior to closing.

The title company will also have done the background work on the existing deed to make sure there’s a clear chain of title or sellable deed. Occasionally, they’ll find issues like an undischarged mortgage, a lien on the property, an encroachment, or some other issue with the title. If an issue is discovered they’ll work to clear it up prior to closing or add it as a known issue in the title insurance policy. Occasionally, issues like this can cause delay or in some cases can disrupt a transaction. It’s important to know that when these issues do come up from time to time, we’ve usually got a way to work through it and get to closing. Once you’ve got a clear title, they’ll write up a new deed conveying ownership to the you, the buyer.

As the buyer, when you show up to the closing table (bring your identification), at a minimum the following items will be in place:

  1. The closing disclosure accurately showing the contract price as well as a list of credits and debits including fuel and tax prorations, title insurance, recording fees, closing fees, appraisal fee, and any other items outlined in the Purchase and Sale.
  2. The new deed conveying ownership to you, the buyer.
  3. The mortgage and promissory note from the lender.
  4. The title insurance policy.
  5. The mortgage balance moved into the title company’s account for disbursement.
  6. The EMD check from whichever agency is holding escrow.

Now, get ready to have writer’s cramp. You’re going to be signing a lot of documents.

At the closing, the funds will all be disbursed to the correct parties including the seller and the seller’s lender, as well as the title company and the real estate agents. There may also be some taxes, professional fees that will be visible on the CD ahead of time. Legally, no funds should change hands at the closing table except what’s disbursed by the title company.

Usually this is the day you take possession of the property. Congratulations!

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