Closing The Sale: Signing /
Settlement / Escrow
It
might seem as though once a sale agreement has been signed that the selling
process is complete. Not only is it not over yet, but some of the most complex
aspects of a real estate transaction now begin.
Once
a contract for the purchase of a home has been accepted, a series of
inspections and checks are typically required to satisfy buyers and lenders. We
help you complete the transaction process by assisting with the many
requirements found in a typical sale agreement and the details of the
transaction process.
What’s
in a
A
sale agreement sets a purchase price for the home and a series of terms and
conditions. For instance:
When
Should You Close?
With
online transaction management now available, closings can occur within a couple
of weeks in some areas - at least in theory. In practice, it takes time to
arrange financing, conduct inspections, obtain appraisals, locate replacement
housing, contact movers, pack and actually move.
While
instant closings are not practical, neither are closings too far in the future.
The problem with closings much past 60 days is that
loan rates are difficult to lock in. If mortgage rates go up, it's possible that
the buyer will no longer be able to afford the home and thus the deal may fall
through. And you don't want to wait that long anyway :-) The result of
these considerations is that most homes close 30 to 45 days after a sale
agreement has been signed.
What
is Escrow?
Escrow
is a licensed and bonded fee service company that acts as the closing agent for
the transaction. They receive and hold the buyer’s earnest money, order
and check title, identify any liens that have to be paid to clear title, prepare
the closing documents, get the signatures and checks, orchestrate the transfer
of funds, and submit the mortgage and title documents to the county recorders
office.
What
Happens during Closing?
“Closing” usually
has two steps. First is a brief meeting at the escrow office to sign the
paperwork needed to complete the legal documents for the transaction and
to set up the required funds transfers. All necessary
papers have been prepared by the closing agents(escrow),
title companies, lenders and lawyers. This paperwork reflects the purchase and
sale agreement and allows all parties in the transaction to verify their
interests. The signing meetings at escrow are generally scheduled a day or two
before the closing date, and are usually scheduled separately for the
convenience of the buyer and the seller.
At
the signing, or preferably the day before, escrow will provide a settlement
document called the HUD-1, which details all the items of expense and
payment that are being done in the transaction, the net amount that the
buyer has to bring a check for, and the net proceeds that the seller will
receive after closing.
The
second and final closing step is the Closing itself: