REAL ESTATE CLOSING PROCESS
For most buyers and sellers, purchasing or selling a home is an emotional roller-coaster ride. But with the right guidance, it can also be worth every second of the journey! Understanding the terminology and the route that leads to home ownership can help put your mind at ease.
The path to home ownership begins with a contract between the buyer and seller. Once both the buyer and seller agree to the terms of the contract, they are now ready for the real estate closing—the legal process that allows the transfer of ownership to occur. This is where Luckett steps in. Once a Luckett location is requested on the contract, the lender sends a Title Order to us, and the closing process begins.
TAXES PAID, DEEDS RECORDED, & POLICIES ISSUED BY ESCROW
1 Title Abstract Ordered
When Luckett receives the Title Order from the lender, we search and examine public records.
Searching title is an extremely important part of the closing process. If the current seller cannot convey a clear title, free of any title defects, then both the buyer and seller are forced to walk away with nothing.
A title defect is any legal right held by others to claim the property or to make demands upon the owner. Title defects such as tax liens are easier to cure, but others, such as an estranged spouse who is unwilling to sell the property, proves a much harder task. It is important that the seller discloses all known title issues to a real estate agent before listing the property.
2 Title Commitment Issued
If no title defects are found, or after all title defects are cured, a Title Commitment is issued and sent to the lender. A Title Commitment is an offer to issue the title insurance policy. The Title Commitment will describe requirements, exclusions, and exceptions that will apply to the policy.
It is important to note that most lenders require title insurance to protect them from undiscoverable title defects that can come up after the title search. The Lender’s policy ONLY protects the lender — and NOT the buyer. Buyers do have the option of purchasing an Owner’s Policy at a discounted rate at closing. For more information about an Owner’s Policy, please check out “The Benefit of Title Insurance” section of our website.
Let’s proceed to the next stop – the Closing Disclosure!
3 Closing Disclosure Sent to Buyer
Your lender must provide a Closing Disclosure to the buyer at least three days prior to closing.
The Closing Disclosure details all of the costs associated with the real estate transaction. Significant changes to the Closing Disclosure after delivery to the buyer may trigger a new three-day waiting period. This applies if the Annual Percentage Rate changes, the buyer changes the loan product, or a prepayment penalty is added.
If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.
If the Closing Disclosure requirements are met, the lender will give Luckett the all-clear to close.
4 Cleared to Close
Once the clear-to-close is given, a Lender’s Package is sent to Luckett along with closing instructions specific to your real estate transaction.
Although Luckett guides all parties through the closing process, we are a disinterested third party to the transaction. We escrow or handle legal documents and funds on behalf of a seller and buyer, and deliver them upon performance by the parties. Once we receive the lender’s funding, all parties are headed to the closing table!
5 Closing Documents Signed
It’s closing day! And while you’ve been prepping for the move and coordinating with utility companies, your Luckett escrow officer has been working behind the scenes, attending to every detail, so that you can rest easy, knowing all the necessary paperwork is in order.
Once all parties have signed, the documents are sent to the lender, and monies are released to the appropriate parties. Keys are given, and selfies are taken!
Congratulations! You have just completed the journey to homeownership!
6 Escrow Officer Finishes
Even after all parties leave our office, your escrow officer still has work to do. He or she records the executed deed and deed of trust, pays any taxes, and pays off any other known debts including a prior disclosed mortgage. Once the recorded documents are returned to Luckett, your escrow officer will issue the Lender’s Title Policy and the Owner’s Title Policy.