What Happens at the Closing
The simple answer is that the Purchaser gives money to the Seller and the Seller gives a Deed to the Purchaser.
Of course there is a little more detail than that, so here goes.
Let’s start with who will be there.
1. Seller and his/her/their attorney
2. Purchaser and his/her/their attorney
3. The Title Closer
4. The Lender’s attorney
5. Real Estate Brokers
6. Representative from the Mortgage Broker
There are a few exceptions to this rule. Sometimes the Seller can’t be there and his/her attorney is there on their behalf with a Power of Attorney.
It is possible there is no lender.
The Real Estate Brokers may not be there, but they usually are so that they can pick up their commission checks.
The Mortgage Broker may not be there.
Where will the Closing take place?
If there is a lender involved then the closing will most likely be at the office of the lender’s attorney since they have the money.
If there is no lender, most likely at the office of the Seller’s attorney.
But, it can be anywhere that is convenient for all parties.
How long will it take?
That is impossible to say. I’ve never had a closing take less that one hour. If there is no lender then the process is much quicker. If there is a lender, the average is about two hours, but I’ve had them take three or four.
Why so long with a lender?
If there is a lender involved, the Purchasers have to sign all the mortgage documents and that is often a stack 2 – 3 inches high. Their attorney will review each document and explain to the Purchasers and they will sign. It can take a while.
Then once the papers are signed, the lender’s attorney must send some of them by fax or email back to the lender for approval. So everyone has to wait. Once the approval comes, the lender will send the money to the lender’s attorney’s bank account by wire transfer. So everyone has to wait. Once the funds are in the account, the lender’s attorney writes the checks, and if some need to be certified or bank checks, someone has to take then to the bank get them. So everyone has to wait. Finally they lender’s attorney can hand out the checks and the closing will be complete.
So what actually happens?
The quarterback of the closing is the title closer. He or she will be responsible for making sure the deed is correct, filing the deed, mortgage, and transfer tax forms, paying off the Seller’s mortgage and issuing the title insurance policy. They also act as Notary Public for the closing.
The Seller’s attorney will have prepared the deed and other transfer documents in advance and circulated them among the title company and other attorneys. The Seller will sign the deed and transfer documents and they will be passed on to the title closer for approval.
Meanwhile the Purchasers are busy signing all their loan/mortgage documents. The ones that need a Notary go to the title closer, then all go to the lender’s attorney. The Purchaser’s attorney will be explaining all this paper to the Purchasers and making sure they sign in all the right places.
The Purchaser and Seller’s attorneys will discuss any other issues that may have arisen, like adjustments of property taxes, fuel oil and so on. Any issues that may have arisen during the walk through, like damage or broken appliances or a mess left behind. They will come to an agreement with their clients and discuss the final numbers for the closing. Generally they will have worked this out in advance and there shouldn’t be any changes.
The lender’s attorney has been reviewing the loan documents and sent them off to the bank for approval, gotten approval and received the wired funds and cut the checks and gotten them certified.
The Sellers hand over the keys and garage door openers.
The lender’s attorney hands out checks to the Sellers, the title closer, and the real estate brokers. If the Purchasers have brought additional funds, they hand that over to the Seller and the title closer gives the Purchaser a copy of the deed. The original deed will be filed with the county clerk and returned to the Purchaser’s attorney. The title closer will give the Purchaser’s attorney the title insurance policy.
Everyone shakes hands and the Closing is complete.