Steps to Home Ownership!
Go to any local courthouse and you can find property records
detailing real estate ownership in your community -- sometimes
records that date back hundreds of years.
These records are important because they provide today's
owners with proof that they have good, marketable and insurable
title to the property they are selling. Equally important, such
records enable buyers to provide proof of ownership when they
The closing process, which in different parts of the country
is also known as "settlement" or "escrow," is increasingly
computerized and automated. In many cases, buyers and sellers
don't need to attend a specific event; signed paperwork can be
sent to the closing agent via overnight delivery.
In practice, closings bring together a variety of parties who
are part of the "transaction" process. For example, while the
history of property ownership has been checked, it's possible
that the records contain errors, unrecorded claims or flaws in
the review itself, thus title insurance is necessary. At
closing, transfer taxes must be paid and other claims must also
be settled (including closing costs, legal fees and
adjustments). In most transactions, the closing agent also
completes the paperwork needed to record the loan.
What to expect.
Settlement is a brief process where all of the necessary
paperwork needed to complete the transaction is signed. Closing
is typically held in an office setting, sometimes with both
buyer and seller at the same table, sometimes with each party
completing their papers separately.
Whatever the case, the result is that title to the property
is transferred from seller to buyer. The buyer receives the keys
and the seller receives payment for the home. From the amount
credited to the seller, the closing agent subtracts money to pay
off the existing mortgage and other transaction costs. Deeds,
loan papers, and other documents are prepared, signed and filed
with local property record offices.
What you need to do.
One of the best parts of settlement is that buyers and sellers
need to do very little.
Before closing, buyers typically have a final opportunity to
walk through the property to assure that its condition has not
materially changed since the sale agreement was signed. At
closing itself, all papers have been prepared by closing agents,
title companies, lenders and lawyers. This paperwork reflects
the sale agreement and allows all parties to the transaction to
verify their interests. For instance, buyers get the title to
the property, lenders have their loans recorded in the public
records and state governments collect their transfer taxes