Real estate: Closing culminates buyer-seller contract

The closing is the culmination of the contract between buyer and seller. It involves the signing of documents and the exchange of money.

Who is at the closing? Typically the buyers, seller, real estate agents for each, the closer from the title company, perhaps a lender and attorney.

The title company closer is charged with being sure that all the documents are properly signed, if necessary notarized and that the correct amount of certified or cashier funds are collected.

They may often close the loan, too. The title company is insuring the title to the property being purchased. They have a vested interest in being sure that the documents are properly signed and that the loans or any liens against the property are properly paid off.

Typically a closing lasts 45-60 minutes. It is prudent to review what you will be signing because there is not time to do it properly at closing. Your real estate agent can get a pre-closing package from the title company with copies of all the documents for your review, a few days ahead.

Assuming the buyer is not paying cash, there are two parts to the closing. One part is the real estate closing documents. These are the documents that transfer the real estate from the seller’s name into the buyer’s name. The second part of the closing is the loan documents where the buyers sign the documents borrowing the money from the bank to buy the home.

Buyers want to be sure their names are correct and that they are taking title correctly on the warranty deed.

On the loan documents the buyer will want to check the interest rate, loan amount and term for accuracy. Sometimes it is difficult to get copies of your actual loan documents several days ahead. If you can get blank ones to read, you can then locate the place to check for those items.

Sellers will have the real estate package to review prior to closing. The seller’s name on the document has been taken from the warranty deed of record from the county where the property is located.

Also included in the seller’s package is a copy of the payoff statements for any loans the seller may have.

They will typically collect interest for a couple days after closing to ensure they have enough money to pay off the loan.

The payoff statement will itemize any late fees, shortages to the escrow etc. Typically the lenders send the borrower the balance of their escrow account plus any interest overage sent with the payoff within 30 days after the loan is paid off.

Both buyer and seller will have their own real estate statement itemizing the debits and credits agreed to under the contract, addendums and inspection notice. The buyer settlement statement will itemize the loan closing costs that should look similar to the good faith estimate that they received from the lender when they made loan application. The HUD-1 Settlement statement compiles both buyer and seller closing costs together in one document.

Buyer and seller will need to bring a photo identification. Sellers will want to bring their keys.

Leave spare keys, garage door openers and appliance manuals in the house.
Buyer should bring a certified or cashiers check made payable to themselves, which they will endorse to the title company.

Laura Olive, CRS, CRP, eco-broker is a broker associate with RE/MAX Alliance. Please write to 215 W. Oak Street, Suite 102, Fort Collins, Colorado 80521, e-mail laura@lauraolive.com or call 970-495-4755. For a complete archive of all her past articles that have appeared in this paper visit my web site at lauraolive.com.