So you’ve finally made it to the end of the road in your real estate transaction – The Closing … Congratulations! You’re so close to completing your sale or purchase, and it’s nearly time to celebrate. But, before you get too comfortable, there are a few things you need to know about the closing process.
“Closing” is the part of the real estate transaction where the buyer pays the sales price contracted for and receives the keys to the new property; and where seller receives the sale proceeds from the buyer. However, in order to properly pass title to the company and, if applicable, obtain the financing, many documents will have to be signed at closing to “seal the deal”.
In the past, closings typically meant that both the buyer and seller, their agents, attorneys and title agents would all get together around a big table for the marathon signing session. It was a big affair. But, in today’s world, closings are typically done as “mail aways” where buyer and sellers sign all documentation on their own and then submit everything to an attorney/title agent, who then is responsible for disbursing all funds via wire transfers, including bank funds, recording all deeds and paying broker commissions, liens, mortgages, etc. However, even though closings have been simplified, there are still things you will need to do in preparation for closing.
1. Prepare and Review all Documents before Closing.
Both buyer and seller are responsible for certain documents in order to close a real estate transaction. If it prudent for you to use a real estate attorney in order to ensure that as buyer you are getting clear title with all liens and other encumbrances cleared. And as seller, that your interest in the property is properly extinguished, but of course, only after any and all mortgages are paid and buyer’s funds are received.
If you are financing a purchase, you will receive a Settlement Disclosure Statement (still commonly referred to as a HUD-1) three days before closing so you that you have plenty of time to review it and confirm that the Good-Faith Estimate given to you by your lender matches the closing statement. If if does not, you will have plenty of time to discuss the discrepancies with your lender. If you are not financing, the Settlement Disclosure is typically released in draft for a day or two prior to closing for all parties to review and settle any issues prior to closing.
2. Last Minute Items.
As buyer, you will most likely want to do a final “walk-thru” of the property, typically 24-hours in advance of closing. This will allow you to confirm that the seller has vacated the property and to identify any last minute issues that the buyer will have to resolve (i.e. furniture not removed, missing appliances, etc).
Also, as buyer, you may want to wire funds to the closing agent in advance so as not to cause any delay of the closing. The closing agent must hold the funds in escrow until all documentation and signatures have been collected.
As seller, you want to make sure that you have removed all your belongings and that the property is in “broom clean” condition prior to the walk-thru. You also want to make sure that all utility companies have been notified of when to terminate services and that you have forwarded your mail to your new address.
3. Get ready to sign, and sign, and sign…
Whether buyer or seller, make sure to take government issued, picture I.D. to your closing. This will be required to sign any and all documents. And if there is more than one buyer or one seller, all parties must be present unless there is a valid power of attorney in place for one to sign for the other. Then, get ready to sign and sign and sign….
Closing a real estate transaction is time-consuming, stressful and wrought with landmines that can result in invalid title or seller not getting its funds as required. It’s for these and other reasons that it’s very beneficial to have a trusted and experienced real estate attorney at your side during the entire process.
If you are buying or selling real estate, please contact Ser & Associates at 305-222-7282 before signing that contract. We have the experience necessary to make your real estate transaction as seamless and stress-free as possible.