In a residential real estate transaction, the term “closing” gets used quite a bit. It can mean different things to different people depending on how involved in the transaction they are, and how much they understand about the transaction process.
For some, closing means everything that happens after the contract, and that definition isn’t necessarily incorrect. For our purposes, however, it’s important to be more specific.
In this section of the Peak University we will focus on the final stages of a real estate closing. This is the specific set of activities that occur after contingencies of the purchase agreement have been met, the title clearing activities are nearly complete (with the exception of final payoffs), and the transaction is ready for the final steps before keys are handed over and the purchase price is paid.
Closing really has three sets of activities:
Pre-closing: this is the set of tasks that the escrow officer or attorney accomplishes prior to the closing day. This includes audits of what has been done so far, gathering the necessary materials, and building the closing documents.
Closing day: this is the set of tasks that occurs on (or near) the closing day. This includes delivering the necessary documents to the parties and obtaining all the funds required to close.
After closing: this is the set of activities that occurs once the closing documents are signed, all funds are in and the transaction is considered closed. This includes a final review of the documents and financials to ensure everything was completed correctly, that the file is ready to be disbursed and recorded, and that final title policies can be issued.
Much of closing occurs behind the scenes as the escrow officer or attorney and others on the team accomplish tasks and prepare materials. For most buyers and sellers, the closing day contains a lot of the action. Depending on the state and title company, the closing day activities may take place in person or remotely and may take place on or before the actual closing date.
Regardless, the buyers and sellers will each have documents to sign. Each will also be responsible for ensuring any funds they are required to bring to closing are timely received in escrow. The buyer, in particular, will be responsible for delivering the purchase price, which may involve working with the buyer’s lender to ensure their loan requirements are met prior to the scheduled closing.
Closing is an important step in the process of buying and selling a property. This is really where the transaction reaches its pinnacle, with the anticipated activities of payment and title changing hands. For any transaction, this is the moment that all the various parties and professionals have been working toward since the contract was signed.
It is certainly worth understanding the various aspects of this moment and its implications for the parties moving forward.
The information provided in Peak Title Professionals, does not, and is not intended to, constitute legal advice. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.
