Closing and Beyond
The real estate closing is a meeting in which payment is transferred from buyer to seller. Closing can also be referred to as settlement or escrow. Local area and state laws can vary, which is why enlisting the assistance of a CENTURY 21® Agent is sound advice.
In general, the closing process begins with the acceptance of an offer. Prior to closing, all conditions of sale (also known as contingencies) must be met. The most common is the buyer’s ability to secure a new mortgage.
A title company is usually hired to conduct a search for any recorded documents that affect the deed to the property. Examples include easements, liens, tax assessments, covenants, conditions and restrictions, and homeowner association bylaws. The buyer and lender must approve the preliminary title report prior to closing.
Once the conditions of sale have been met and the preliminary title report has been approved, all parties will agree to sign closing documents. The preliminary title report then becomes the final title report, on which any applicable title insurance is based. After the documents have been signed, notarized copies will be forwarded to the lender, funds will be released, and the sale will be recorded at the local recorder’s office.
TIP: Closing is also the time when “adjustments” will be made. For instance, suppose you’ve pre-paid taxes four months in advance. At closing, you will be compensated by the buyer for the prepayment.