Although, purchasing a home can be a tedious process, the right Real Estate Agent can make it a relatively smooth one. Researching information on the homeownership process will also benefit you. Throughout this blog series...I have tried to walk the homebuyer through the process from selecting your Real Estate Agent to House Hunting to understanding negotiating your offer and now closing the escrow transaction.
Escrow closing signifies legal transfer of title from the seller to the buyer. Once all the conditions of the escrow have been satisfied your Escrow Officer will inform you or your Real Estate Agent of the date escrow will close and takes care of the technical and financial details.
Closing day is also the day to pay "closing" or settlement costs (accumulation of separate charges paid to different entitles for the professional services associated with the buying and selling of Real Property). Closing costs will vary; however, when buying your home and obtaining a new loan, an estimate of your closing costs will be provided to you due to the Real Estate Settlement Procedures Act after you submit your loan application. The Real Estate Settlement Act provides you with a good faith estimate of what your closing costs will be in the real estate process.
Upon closing, the title or escrow company will disburse monies to the different parties that have fulfilled their responsibilities, according to the escrow instructions, once funds are available.
So...what are you expected to pay for at closing? In California, "who pays" varies from county to county. This question is best answered by a matter of agreement between the buyer & seller. Usually this agreement is based on the customary practice in your county.
Here is a list of possible closing costs (buyer)
- Title Insurance Premiums
- Escrow Fee
- Document Preparation Fee
- Notary Fees
- Termite Inspection (according to contract)
- Recording charges for all documents in buyers name
- Interest on new loan from date of funding to 30 days prior to first payment
- Inspection Fees
- All new loan charges
- Tax proration
- Beneficiary statement fee for assumption of existing loan
- Homeowner's Association Transfer Fee
- Home Warranty
- Any city Transfer tax/Conveyance Tax
- Fire Insurance premium for first year
- Impounds (If applicable)
*Fees may be negotiable
At closing, all parties signing the documents must bring proper identification which may be a valid driver's license, identification card or current passport. The Title Company will schedule a time to meet a notary or attorney (depending on the state you live in) to witness the signatures and verify your identity. Remember, the notary is not a legal counsel and can not give you legal advice.
The signing can take place at the title or escrow company, your home, or even your place of work. It is always better to meet at the escrow or title company to have personnel available to review and explain your title policy and your closing statement. As your Mother and Daughter Realty Team, we make it a point to always be present at the closing to assure your questions and concerns are answered promptly and acurately. Allow 35 to 60 minutes for your signing appointment.
The title or escrow company will inform you the amount due at the time of closing. The amount due needs to be made in cashier's check, issued by a California institution, made payable to the title company or escrow office.
*If you have further questions that your title, escrow officer, Real Estate Agent or Loan Officer can not answer. Or if you need legal or tax advice, contact your attorney or accountant.
The day escrow closes is the day the deed records with the county and you become the owner of your home (it could take 6-10 weeks from that date for the county to mail you the original signed/recorded deed. After the close of escrow, your Real Estate agent will contact you regarding the disbursement of the keys.
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