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Closing

In real estate transactions, the closing is the event at which you and the seller sign all of the documents to complete the transaction.  The usually occurs in an office.  While you and the seller will do all of the signing, others will be in the room to assist, including a closing agent.  The closing agent might be your real estate attorney or the seller’s real estate attorney.  Others present might include your real estate attorney, the seller’s real estate attorney, a mortgage loan officer, your real estate agent and the seller’s real estate agent. 

 
The Closing Agent 
 
The closing agent is the chief administrator of the closing process.  He or she will:
  • Calculate what payments are to be made, and by whom, based on the purchase contract;
  • Prepare documents for the closing; conducts the closing;
  • Make sure taxes, title searches, real estate commissions and other closing costs are paid;
  • Ensure that the deed and any mortgages are recorded, and
  • Ensure that the seller is paid.

Many, Many Details  
 
The goal of the closing is to transfer title or ownership of a property.  A lot of paperwork needs to be processed to accomplish that – more than you could possibly read during the event.  That’s why it is important to have a real estate attorney at your side.  He or she will be well acquainted with all of the documents, be able to explain them to you and make sure that your interests are protected.
 
Part of the closing process will be financial housekeeping pertaining to ongoing homeownership expenses such as property taxes and utility assessments.  Some of these expenses will have been paid in advance by the seller and you’ll be required to reimburse the seller for your prorated share of those expenses.
 
Your real estate attorney can determine the value of these expense adjustments in advance so you will have no surprises on closing day.   

 
Closings in Separate Locations  
 
The buyer and seller can’t always be in the same location at the time of closing.  In such cases, the closing can be completed separately, with documents moving back and forth by fax and courier and funds being transferred electronically.  You might simply go to your real estate attorney's office to sign the paperwork. When the closing agent receives all of the documents signed by both parties and verifies they are correct, he or she proclaims the closing official.  

 
Documents to be Signed  
 
Closings involve the signing of many, many documents.  Here are some of them:
  • Mortgage note. A written promise that you will repay your loan.
  • Mortgage. The document that places a lien on property for the lender as security for the money borrowed.
  • Closing or HUD-1 statement. This is a full list of all the costs involved in the closing, including your earnest money, expense adjustments to the closing costs, real estate agent's commission and the exact amount of the loan and the amount due to the seller.
  • Buyer's funding check. The check from your lender may be payable to you or jointly to you and the closing agent; you'll have to endorse it over to the closing agent.
Worry-Free Closings  
 
That’s a lot to think about and keep track of, isn’t it?  Don’t worry.  If you engage a real estate early in the home-buying process, he or she will be there to make sure closing day goes smoothly and without unpleasant surprises.
 
Unpleasant surprises?  How about having to pay unnecessary taxes because contract terms weren’t in your favor or discovering at the last minute that the purchase contract terms aren’t enforceable?  Things like that have happened at other people’s closings. Make sure they don’t happen at yours.  Engage a real estate attorney.