You’ve now successfully gone through the grueling, nerve-wracking benchmarks of a home-inspection, appraisal, loan processing, (if you’re a buyer), packing…hoping…and praying everything goes smoothly. There are a lot of instances where the topic of closing resonates uncertainty among clients because it’s not something a large percentage of people ever do more than one…two..maybe three times in their lives, (unless interest rates hit a new low and then refinancing is on the horizon!). There is a common misconception that once you go in and sign, you’ve closed; it’s a done deal and now “Where’s my keys?” or “Where’s my money?” Nope. Not the case. Not that simple. There are actually several things that happen to constitute closing, and until they have all occurred you are left in a purgatory of wonder. I won’t bore you with the gory details of what the Lender, Title and Escrow companies are doing behind the scenes because they really do A LOT of hard work to get your file prepped for closing. They have to make sure all i’s are dotted and t’s are crossed. Let’s talk signing, funding, and recording.
If you’re a Buyer…
For the last 45ish days, (hopefully not too much more), your loan officer and processor have been working expediciously with their underwriters to ensure they have everything they need to let you borrow some cashola for your new casa.
Once the final underwriting department flashes the green light, they will send you a Closing Disclosure that itemizes all costs/credits associated with your financing. Once you’ve reviewed the Closing Disclosure, (CD), you MUST sign it as this triggers a 3-business-day countdown. Legally your loan cannot close before the end of this waiting period. At the end of the 3-days, your lender and Title & Escrow Company will work with you to schedule an appointment to go in and sign.
Your Signing Appointment.
Ring Ring! Escrow will call you to schedule a signing appointment as well as inform you of how much money to bring in. Time to break the bank. The painful withdrawal of a large sum of money you have feverntly saved, is now going to become a roof over your head. The closing funds must ALWAYS be in the form of a Bank Wire or Cashier’s check. NO PERSONAL CHECKS OR CASH ALLOWED! Well…you could take a personal check, but only if the amount is for $500 or less, (depending on the company policy). Be sure to take your VALID driver’s license to your signing appointment as there will be a large stack of documents which must be notarized. Your signing will take approximately 30-45 minutes, but prepare for more just in case you have questions. One thing to remember is that if you want the house, you gotta sign the docs. Getting too detailed in trying to read and understand what you are signing will just delay things more. Unless your numbers look inaccurate, there isn’t a single document in the loan package you can contest signing if you want your loan to go through. Refuse to sign a document and your lender will refuse to loan you money. Sorry to break it to you. Plus, it’s super annoying to your escrow closer if you start drilling them with questions they don’t have a legal capacity to answer anyway, and it really can slow things down. If you have questions they have to be directed to your lender. After you sign, the escrow officer sends all of your documents back to the lender to review, and then once they’ve reviewed that no signatures, initials, or dates were missed, they will FUND the loan.
The lender has all documents back for review and now has to run down their checklist to make sure EVERY document is back, signed and dated correctly, and notarized correctly if necessary. Once all is deemed to be sufficient, their ‘funding department’ can initiate and wire your loan proceeds to the escrow company.
This is the final step. The homestretch. The Escrow Company has received the wire from your lender for your loan proceeds. Though now that they have the funds, this does not mean they can immediately go record the sale at the county courthouse. They MUST wait until your lender sends a confirmation that all loan conditions are clear and they have been released to record. Once released, however, they are free to head on down to the County to record the transaction. THIS. THIS MOMENT is what you’ve been waiting for. Recording. You are NOW officially a new homeowner. Congratulations!
If you’re a seller…
You have been party to an interview from the Title Company and felt like you gave your life history, with the exception of a blood sample and first born child. Social Security Numbers, Marital Status, Mortgage Account Number, Contact info… It’s a lot. BUT, this is all necessary and vital information to do what is called ‘clearing title.’ Mortgage payoff(s) must be ordered, (if any), to ensure that upon the closing of your sale, you deliver clear title to the buyer. All liens or, (sometimes), judgements must be cleared.
As a seller, you have it a bit easier than the buyer. Once you’ve provided all the information necessary to the Title Company, it’s really just a waiting game. Waiting until your buyers lender clears them for loan docs. If at any point during escrow you plan to leave town for an extended period, you should always notify your Realtor or the closing agent so they can note your file and make arrangements ahead of time for a Power of Attorney or the Pre-Signing of your Deed. The Deed is the one single important document that a notarized original is required from a seller to record a sale.
Your signing appointment.
Estimate approximately 30 minutes for your appointment, however it’s usually much shorter. Take your Driver’s License for ID verification. Make sure you have given thought to how you’d like your sales proceeds delivered – if you want them to be direct deposited, you will need to have account information or a voided check.
At this point, you are just waiting for your buyers lender to deliver the wired loan-proceeds to escrow and release them for recording. Once both events have occurred, the Title Company can head on down to the County Courthouse to record the sale. This is when it’s official and you are now CLOSED. Congrats!!
What about Keys?
Key transfer technically doesn’t have to occur until 9 PM the day of closing. Make sure arrangements for key transfer and timeframe have been clearly communicated between all parties.
I’m a seller, where’s my money?
I usually like to inform my clients that their funds will not appear in their account for 24-48 hours, depending on the day of the week and timeframe of deposit. If you closed on Friday, and the recording happened late in the day, there is a chance your proceeds will not appear in your bank account until Monday. Do not be alarmed. There are wire-cut off times with the FED, as well as with your escrow company and sometimes the cut-off times are missed if the recording didn’t occur prior to the cut-off. You may also elect to PICK-UP your check at the Title Company after recording. They will call and notify you once it’s ready. Keep in mind some banks will put a ‘hold’ on checks for large amounts for up to 3-10 days just to verify sufficient funds.
Congrats on a successful closing!
What questions about closing can we answer for you?
Keeley Wagner is a licensed Realtor with The Connors Group at Windermere Group One and a former Licensed Closing Agent. Check out http://www.aprilconnors.com for more information.