The paperwork

B - Title or Escrow Company: Closing functions?

Their function:

Whether you’re selling with an agent or you’re by-owner, once a contract is agreed upon, the next move is to engage the services of a title company (title insurance company) or escrow company.

These are the specialists who coordinate the completion of your sale and the closing (settlement). The “closer” or “closing agent” at a title company or the ”escrow agent” will be your primary contact for questions.

The paperwork:

The key responsibilities of this closing entity are to make sure that:

• All outstanding property liens and mortgages are paid before or at closing.
• The lender gets a good mortgage. This is one that is endorsed by the proper parties and covers their financial commitments, obligations and remedies (in case of buyer default).
• The various real estate taxes and other costs (transfer fees, survey, attorney, inspection fees, etc.) are paid at or prior to closing.
• Checks are prepared for any real estate commissions due as well as checks for other services that are to be paid for at closing.
• No funds or property changes hands until all of the contingencies and instructions in the purchase contract have been satisfied and all necessary documents have proper signatures.
• A check is prepared for the net proceeds due you.
• The buyer obtains a clean (lien free) title to your property.
• The new deed is properly recorded.

You should receive a copy of the closing statement detailing both the buyer and seller expenses and disbursements anywhere from a day to a week before the actual closing.

At the closing, you and the buyers both sign documents pertaining to the property. In addition, buyers will sign documents relating to the loan, if any. This process is done with the buyers and sellers together at a “closing table”, the parties could be in separate rooms or the document signings could be done separately.

The settlement, including title transfer and distribution of the monies is usually done immediately at the closing. However, in some areas, ownership and funds are not transferred until the deed has been recorded in the county, which could take a few days.

A “dry closing” refers to a signing of all documents with a delay of time (sometimes up to a few days) until the funds (checks) are disbursed. The procedures will vary slightly depending on the customs and laws where the transaction takes place.

Select a closing company:

Shortly after the contract to purchase has been signed,  the title or escrow company needs to be chosen to coordinate the sale. When you bought the house, what was the process then? probably, pretty much the same today. Ask Your agent or attorney who selects the closing company and how the process works in your area.
 
If it is the buyers’ responsibility to choose the closing company, have them advise you of their choice so you can contact them. They may need copies of certain documents from you and will need to communicate with your lender for payoff information (outstanding loan balances on your home).

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