The Closing Process Explained
When you purchase your new home, at some point after your offer is accepted you and the sellers will be scheduled for a “closing” or “settlement.” Since buying or selling property is an infrequent event for most of us, what actually happens at settlement can be a bit of a mystery. We hope this brief explanation will give you a clear picture of the process.
Closing, or settlement, are the terms used for the point in time that the title to the property is transferred to you as the buyer and, if you are borrowing to finance the purchase, the mortgage is signed and the purchase funds are transmitted by the lender.
The Good Faith Estimate
Information about the costs associated with closing on your home should be provided to you even before you sign the purchase agreement, as these costs are an important factor in understanding the true cost of the home. And, if you are obtaining a mortgage to purchase the property, your lender has three days from the time you apply to provide you with a Good Faith Estimate (GFE) detailing your loan costs, as required by the US Department of Housing & Urban Development.
The Steps to Closing
After the seller accepts your purchase offer, preparation for closing begins immediately. Coordination by all parties is essential to make sure everything is being addressed to ensure a successful closing. As your settlement agent, Trident Land Transfer will handle all of the necessary steps in the closing process:
The Good Faith EstimateFirst, if you have given the seller an earnest money deposit, we will see that it is promptly deposited into an escrow account in your name where the funds are held until the time of closing.
The Good Faith EstimateNext, we will request preliminary title work. A title professional will search and examine the public records for information related to your home’s title. This process reveals any title flaws that must be cleared before the property can change hands. For instance, the previous owner may have failed to pay local or state taxes. Or there may be an outstanding mortgage or judgement on the property. Trident Land Transfer will ensure that such obligations are dealt with and will resolve any issues we find well before you go to closing. If the purchase agreement calls for an existing mortgage to be paid off, we will order payoff figures from the lender. Where required we order a survey.
The next step is preparation of the HUD-1 Settlement Statement. The HUD-1 is a federally mandated form used to disclose all of the costs associated with the closing for both you as the buyer and the seller.
Going to Closing
On closing day, the property will be transferred from the seller to you. You will sign a number of documents that will be explained by your Trident Settlement Officer. The Settlement Officer may make several calls to verify things such as the status of the property taxes or homeowners association dues, if applicable. Once all of the signing is done, the house is yours! Congratulations on achieving the American Dream!
A final note: although you may not be aware, the process continues after the closing! Your Trident Settlement Agent still must forward payment to the lender, pay all the other parties who performed services in connection with your closing, pay out any net funds to the seller and order a final search of the title to your new home before finally recording the deed, mortgage and all other documents legally required to complete your purchase.
But you don’t have to be involved in any of this. Trident Land Transfer takes care of all of the post-closing details! Your job is to enjoy your new home!