The closing process is one of the most important aspects of purchasing a new home. It's a life-changing event and if you're reading this because you're starting the process — congratulations! It's the final step of a long journey and comes with a variety of measures to make the entire transaction legal and usually ends with a set of new keys in your hand. The ceremony of events includes the signing of documents and payments. It can take quite some time. Each part is essential, and understanding what you are getting yourself into will make the entire process run a bit smoother. We've answered some of the most common questions about the closing process.
What is closing?
Closing in real estate is when you finally become the legal owner of your new house. During the contract phase, you and the seller will set a closing date. The closing date should be far enough out to secure your money in earnest and to give your agents time to work with the lender and title company to secure the deal. During the closing, you'll bring your down payment and sign all the contracts to make ownership legal. Some of the documents included are but not limited to:
- Promissory Notes
- Truth in Lending Statement
- Mortgage or Deed or Trust
- Closing Disclosure
- Warranty Deed or Title
- Abstract of Title
What is a closing attorney?
A closing attorney works with the buyer to oversee the purchase and sales agreement. The attorney reviews the documents carefully, looks for any errors, and tries to get you the best deal possible. A closing attorney usually will oversee the purchasing of title insurance and review the purchase agreement. A closing attorney's involvement is only to help you get the most out of purchasing your new home.
Do I need a real estate attorney?
A real estate attorney can help buyers in purchasing of a new home from the moment they start looking. While shopping for your new house, many buyers and sellers will go into a contract that allows buyers time to inspect the property, secure finances, and check the title. Having a real estate attorney with you has immense benefits as the attorney works with you from the very beginning to find the best deal and negotiate costs. Additionally, your real estate attorney can do the closing attorney's job, so you only have to work with one trusted real estate lawyer throughout the entire process.
What is a title company?
When you buy a house, a title search needs to be completed to ensure there are no errors. The title company will confirm the seller has the right to sell the property and that there are no back taxes or remaining balances on the property. The title company may also confirm easements, encroachments, and examine the survey.
Will I need to purchase title insurance?
Most lenders will require title insurance before agreeing to finance the purchase. Title insurance is designed to protect the lender and/or buyer on the off chance something materializes down the line that denies the owner’s rights to assert legal ownership. The title insurance may cover legal fees and reimburse you or your lender for the cost of the property if you are unable to claim the house as your own. While it's not legally required in the state of Tennessee for all homeowners to purchase title insurance, it's worth the investment to protect your assets.
What to bring to closing?
The closing process is arduous. Patience is the first thing you should bring with you, but there are a few items that you will want to have as well. Closing includes signing all documents. You'll want to bring:
- Photo I.D. - such as a driver's license or a passport. Asking your real estate attorney in advance and you can be guided on which I.D. to bring.
- Proof of Insurance - This is both homeowner's insurance and title insurance if required by the lender. The down payment is required at the time of closing.
- Down payment - A certified check or cashier's check is usually sufficient. Sometimes you're required to have two. The closing attorney or agent will give you the details in advance, so you are prepared.
- Purchase and Sales Contract - Always bring a copy of the final purchase and sales contract. There is a lot of information that you will go over and if you need to confirm details, having this on hand will be helpful.
Who is present at closing?
All closing procedures vary, but on average those present at the closing will be:
- The closing agent - that person will either work for the lender or the title company.
- Attorney - If you have a closing attorney that person will be with you during this final stage of the proceedings. If the seller has an attorney, that person will be present at this time as well.
- Title company representative - The representative for the title company will be on hand to provide written documentation of the ownership.
- The seller - The individual or individuals selling you their house.
- The real estate agent
- You - the home buyer
- The lender - the lender could also be called the mortgagee.
Hiring a Closing Attorney
The closing process requires acute attention to detail. Having a trusted closing attorney with you will streamline the process and make it easier to get your questions answered.
At Rochford Law & Real Estate Title, our clients receive personalized care and effective legal counsel as they buy or sell their home. For more information about our services, visit our website.