Closing Proceedure

 

Whether you’re buying, selling, or refinancing, a lot of work goes into getting you to the closing table.  Most happens behind the scenes, but just so you know…

Step 1: Title Search

Title searches verify who owns property and reveals interests others have in it.  Are there mortgages?  Co-owners?  Have heirs inherited it?  What if one of the owners is a minor or deceased?  Have the owners been divorced?  If so, are child support payments current?  What if property taxes haven’t been paid?  Or income taxes?  Is the driveway shared with a neighbor?  Are there oil & gas leases?  What about overhead or underground utilities?  Will a pending bankruptcy cause a problem?  What happens if one of the parties has been sued?  Or if mechanics liens have been filed against the builder?

A title search sorts these out.  Problems need to be spotted before a closing, not after.

To do this, we search the county’s public records either for the past 50 years or from the last time title insurance was issued, whichever is shorter.  The sole job of our two abstractors is to search titles, using either records in-house or at the Courthouse and Justice Building.  Even in today’s computer age, title searching can be time-consuming and tedious.  One thing’s for sure: it requires experience.

Step 2: Examination

Once the public records have been searched, our examiners take over, determining whether there are problems to resolve.  All property comes with baggage, some staying with the property (real estate taxes, utility easements, use restrictions), others needing to be off-loaded before or at the closing (mortgages, federal tax liens, court judgments).

Once all this is figured out, the examiners prepare a title insurance commitment that shows what needs to be done for us to be able to insure good title, taking into account which third party interests will stay with the property after closing.  Too, examiners are usually the ones who prepare the deed and other documents to be signed at closing, subject to the supervision of our attorney.

Step 3: Closing

In a purchase and sale, this is the day money and ownership change hands, while in a refinance, an old mortgage is paid off in favor of a new one.  Usually, sellers, buyers, and borrowers come to one of our offices and sit at a table and sign.  But if parties can’t attend, documents are shipped off-site for signature before a notary public.

Most sit-down closings take an hour or less, but as with searches and exams, the end product is just the tip of the iceberg.  The real work goes on behind the scenes: ordering payoffs for mortgages, liens, and homeowners’ association dues; coordinating with the parties, real estate agents, and new lenders; reviewing umpteen pages of closing instructions from lenders; checking  lenders’ closing packages to be sure borrowers’ names are spelled exactly right; working up the numbers on the closing statement; sending the closing statement to the parties for approval; verifying incoming funds have been received (usually by wire); verifying parties’ identities using their valid, government-issued, photo IDs; explaining the documents to the parties, conducting the signing, then disbursing funds to all who are to be paid, whether outgoing lenders, other lien-holders, real estate agents, incoming lenders, other service providers, and/or the parties themselves.

Step 4: Post-closing

Once the closing is over, our work is far from done.  Documents must be scanned into our archive, copies made for parties, and originals shipped or delivered.  Deeds take a roundabout route to the County Recorder’s office, stopping first at the County Assessor and Auditor before having an instrument number assigned by the Recorder.  Refinanced mortgages go straight to the Recorder, but mortgages in a purchase and sale can’t be recorded until after the deed.

Closing Documents

Here are some of the documents sellers, buyers, and borrowers may be required to sign at closing:

Closing Services Agreement
Vendor's Affidavit
Mortgagor's Affidavit

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