The Closing: What to Expect
What is a Real Estate “Closing”?
The “closing” is where some or all of the following individuals meet to finalize the transaction and transfer ownership of the property from the Seller to the Buyer:
- The Buyer
- The Buyer’s Real Estate Agent
- The Seller
- The Seller’s Real Estate Agent
- The Loan Officer
- Title Closer
The purchase agreement describes the property, states the purchase price and terms, sets forth the method of payment and the date of closing where the actual transfer of the property title will occur.
If financing the property, the lender will require a document to be signed, usually a promissory note, as evidence that the Borrower is personally responsible for repaying the loan. The Borrower must also sign a mortgage on the property as security to the lender for the loan. The mortgage gives the lender the right to sell the property if payments are not made. Before papers are exchanged, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records by Siena Title.
At closing, the Borrower will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check. Your mortgage advisor or title closer will notify you of the exact amount at closing.
What is an Escrow Account?
An escrow account is a neutral depository held by the lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which are due in the future. The Borrower will pay one-twelfth of the annual amount of these bills each month with the regular mortgage payment. When the bills come due the lender pays them from the special account. At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they become due.
