Jan 9

What is the real estate closing process?

The real estate closing process commences with a seller and a buyer reaching agreement upon the terms for the sale and purchase of real estate. Real estate agents and attorneys assist in this process, and the terms of the agreement are inserted into a written contract. The written contract contains such terms as:

1. The names of the seller and buyer.

2. The sales price.

3. The deposit.

4. Whether the buyer can cancel the contract if the buyer is unable to obtain a loan and the terms of that loan.

5. The day of closing.

6. Who will pay the documentary stamp tax on the deed.

7. Who will pay for the title insurance.

8. What happens if there is termite damage and who pays for it.

9. What happens if there is a title or survey defect and who pays for it.

10. Who pays for the termite inspection.

11. Who pays for the survey.

12. What happens if there is a physical defect in the structure on the real estate (e.g., the roof leaks or appliances do not work) and who pays for it.

13. Who pays for the real estate taxes for the year.

14. Whether there are tenants on the property and how much rent is being paid.

15. Who the real estate agents are and how much commission they will be paid.

16. Where the closing is to be held.

17. What happens if either the seller or buyer breaches or fails to perform their duties and obligations under the contract.

The signed contract typically calls for the closing to occur within 30 days, on the average, after the date the seller and buyer sign the contract. The closing is the date on which the seller signs all the documents necessary to convey the real estate to the buyer, the buyer signs the loan documents (e.g., the note and mortgage) necessary to obtain any loan being used to pay for the real estate, each party pays the costs and expenses of closing to which they have agreed, and the seller receives the monies to which the seller is entitled from the sale. The average 30 days time between the date the contract is signed and the date the closing occurs is designed:

1. To provide the seller with time to move out.

2. To allow time for the title to the real estate to be reviewed to ensure that the buyer will receive good title and ownership to the real estate, free and clear of all liens and encumbrances such as mortgages (except for any mortgage the buyer obtains).

3. To give the surveyor time to survey the real estate.

4. To allow the buyer time to apply for a loan.

5. To allow the lender time to review the buyer’s credit, obtain and review an appraisal of the value of the real estate, and to prepare the loan documents.

6. To give the buyer time to inspect the condition of the real estate.

7. To provide time for the termite inspection.

8. To allow the closing agent time to prepare the closing documents such as the settlement statement and deed.

The real estate closing process centers around the above-mentioned closing agent. The closing agent may be a real estate attorney or a title company. Barnes Walker is both. Since the real estate closing process centers around and depends upon the closing agent, the seller and buyer should strive to obtain the best qualified, most experienced, most efficient, and most trustworthy agent that they can obtain. Barnes Walker is such an agent, handling more closings than any law firm and most title companies in Manatee County, with the value of the real estate closings being in the millions of dollars annually.

Barnes Walker can handle and bring together all of the many aspects of the closing on deadline. If necessary, Barnes Walker can be brought into the process at the very beginning. For example, if the seller and/or buyer does not have a real estate agent or an attorney, Barnes Walker can advise upon and prepare the contract. Barnes Walker can also hold the buyer’s deposit in its trust or escrow account. If the buyer needs recommendations for a lender and/or insurance agent, Barnes Walker can so advise. If the buyer does not know a surveyor or termite inspector, or have time to select one, Barnes Walker will order these services for the buyer. Barnes Walker will review the title/ownership of the real estate and provide title insurance policies. Barnes Walker will coordinate with the seller, buyer, lender, surveyor, termite inspector, home inspector, and homeowner’s insurance company to ensure that all the matters necessary to close on deadline are present at closing, such as attendance by the seller and buyer at closing and the delivery of the loan documents, the survey, the termite and home inspections and the insurance to the closing.

Further, Barnes Walker will prepare all of the closing documents necessary to convey title from the seller to the buyer and track the closing monies, such as the settlement statement, deed, affidavits, certificates, tax proration agreements, Forms 1099, bills of sale, and contract addendums. As closing agent, Barnes Walker hosts the closing and serves as a neutral third party that all parties to the closing can trust. For example, the seller can sign and deliver the deed to Barnes Walker, knowing that the deed will not be recorded and delivered to the buyer until all monies necessary to pay the seller and the buyer’s closing costs have been received. Conversely, the buyer can deliver the monies necessary to pay the seller and the buyer’s closing costs with the peace of mind of knowing that no monies will be delivered to the seller unless the buyer receives good title to the real estate, free and clear of all liens and encumbrances except the buyer’s mortgage.

Finally, as closing agent, Barnes Walker offers the convenience to the seller and buyer of paying, for the seller and buyer, all those parties who provide services to the seller and buyer necessary for closing. For example, the seller does not need to worry about writing checks to pay the real estate commission, the documentary stamp tax on the deed, the title insurance premium, determining and paying off the seller’s mortgage, etc. Barnes Walker does all this, simply deducting these costs from the seller’s check. Similarly, the buyer does not have to worry about separately paying for the survey fee, loan costs, termite inspection bill, etc. Barnes Walker takes care of making all of these payments, simply adding these costs to the amount of money that the buyer needs to bring to closing. Barnes Walker is able to provide all of this facilitation because the service providers know and trust Barnes Walker to ensure that they will be paid. At the closing itself, Barnes Walker ensures that all documents are properly executed, all checks and keys are delivered and all parties receive copies of all documentation.

In conclusion, if you desire to guarantee a fast, smooth, efficient and problem-free closing for your real estate transaction, or if you simply need further information on the real estate closing process, please contact Barnes Walker & Goethe, Chartered, 3119 Manatee Avenue West, Bradenton, Florida 34205. Telephone: 941-741-8224. Facsimile: 941-708-3225. email@barneswalker.com

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