Smooth closings or escrow don't just happen. Real estate agents, mortgage lenders, attorneys, title companies, surveyors, insurance agents, and the property buyer and seller can contribute or hinder a successful closing or escrow. Often, buyers and sellers reach this concluding occasion and not know what they could have done to prevent delays or no closing at all. Here are some tips to move you along to accomplishing your goal; to buy or sell a home.
-Closing. The terms agreed to in a real estate contract are fulfilled by the buyer and seller. The seller delivers the title to the buyer in exchange for the contract purchase price. The seller also delivers a deed, title evidence and insurance, property survey, leases if applicable, and proof of any required repairs from the result of the buyers inspection(s). It is recommended that you consult with and retain an experienced real estate attorney for all real estate closings or escrow.
-Closing in escrow. A disinterested or neutral party coordinates all the aspects and documents related to the transfer of the property from the seller to the buyer. Escrow agents may be title companies, attorneys, trust or escrow companies. Check with state laws to see if escrow closings are legal and if so what the procedures are for conducting one.
-Survey. A new survey should be issued when your purchase or sell a property. This update will confirm any new easements or encroachments in addition to the documented location and exact size of the property through a diagram and written legal description.
-Title. Is the legal document that gives you ownership or evidence that you own a specific piece of land. Investigate the different ways you and or others can hold title in your state.
-Title insurance. This is delivered to the buyer and the buyer delivers it to their lender. The insurance policy is issued after a search of the public records for a property. The search looks for liens, easements, conditions, encumbrances, and restrictions, that can affect the marketability of the title.
-Deed. Title is the right to hold an ownership interest in a property, the right is transferred through a deed. There are several common forms of deeds, learn about deed options.
-IRS Form 1099. The closing agent must report all real estate transactions to the Internal Revenue Service.
-Real Estate Settlement Act. A form known as the HUD-1 statement or the Uniform Settlement Statement is required in all residential real estate transactions and with full disclosure of all settlement costs. This form applies to those loans financed by all U.S. government related mortgage loans. Most closings or escrow today use this form.
-Closing statements. A separate accounting from the HUD-1 statement, that is an accounting of all the debits and credits to the parties in a transaction.
-Prorations. Some expenses or items related to the property or mortgage loan are prepaid or paid in arrears must be pro-rated between the buyer, seller or mortgage lender at closing or escrow. Proration customs vary by state, inquire how prorations are done in your locale.
-Homeowners insurance. Most mortgage lenders require that you bring proof (known as a binder) that you have homeowners insurance on the property you are purchasing.
-Keys and automatic garage door openers. Don't forget to bring all the keys if you're the seller, or have them delivered to you if you receive possession at closing or escrow.
-Certified checks. Most closing agents require all parties who need to bring funds to close a transaction bring the funds in the form of certified checks. These checks verify that the funds are available when the check is presented.
-Bring photo identification. After 9/11 all closing agents require you to bring photo I.D. to any closing or escrow.
Mark Nash is the author of Fundamentals of Marketing for the Real Estate Professional, Starting & Succeeding in Real Estate, Reaching Out: The Financial Power of Niche Marketing, and 1001 Tips for Buying and Selling a Home. Mark is a contributing writer for: Realtor (R) Magazine Online, Broker Agent News, Real Estate Executive Magazine, Principal Broker, and Realty Times. His tried and true real estate tips has been featured on Business Week, CBS The Early Show, CNN, HGTVpro.com, The New York Times, and USA Today. Purchase his books at http://www.1001RealEstateTips.com.
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