Originally Posted at Real Estate Transaction Series: The Closing
Ah closing day. The time that everyone works towards from the get go. This is the day that the seller gets to hand over the keys to the
buyer and move on in their new direction. The home buyer gets the keys and starts a new life in their new home. This can be especially exciting for a first time homeowner.
Closing is the big day. The culmination of all the negotiating, good or bad and all the work to get to this final event. So appropriately, the closing may be the most important part of the real estate transaction. Actually, it is. Closing is also the time when all of the details of the real estate transaction have been completed and now ownership is exchanged. Some of those details include financing, title work, inspections, the list goes on.
At closing, there will be a number of different documents to sign so warm up your writing hand. Typically the closing takes place at either a title company or a real estate office. Not always. Some states may require it take place at an attorney’s office. The closing process can be different too.
In many states there is an escrow period following closing and in other states like here in Colorado, we are a “table funding” state, meaning the funds are disbursed at closing and there is not an escrow period. This is a really important point, especially if you have a lender that is not familiar with table funding and is expecting to fund after an escrow period. But no matter where you close, the paperwork is very important. There are forms and documents required by the government, by the lender if the buyer is financing and usually by the county and local jurisdiction. All are important and all should be explained and understood.
A key document to sign are the buyer and seller net proceeds and if the buyer is financing, the HUD. This is where the cost figures for both the seller and the buyer are put in one place and detailed to show who pays for what and how much. It is very important and needs to be understood. This is where you are debited or credited for the costs of the transaction based on your contractual agreement.
So, the closing is both the most important part of the real estate transaction as well as the most anticipated. Often the figures for the final proceeds are complete prior to closing and all parties can have a chance to go over them, understand them and make changes if necessary. This doesn’t always happen but when it does, the closing can go pretty smooth except for all that signing!
The Real Estate Closing is also a time where the seller and buyer can go over some details that may have been overlooked, such as location and number of the mail box if it’s a grouped box, maybe the garage door key pad code or other details that will be important to the buyer once they move in.
Note: This article is intended to provide general information and is not intended to provide specific advice.
photo courtesy of Bohman – Flickr Creative Commons
Real Estate Transactions: The Closing is the 3rd Post in my Real Estate Transaction Series. You can also read the others as well here:
The Real Estate Transaction Series: Final Walk Through
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