The closing is where all the final paperwork is signed and when possession of the property changes hands. This is normally done at a title company. The days leading to closing can be stressful as all the final requirements, inspections, and paperwork must be completed. Our goal is to make the closing as stress free as possible by managing deadlines and helping you work through the issues.
Title Work
When you purchase a home, you want to make sure you have a clear title with no liens or past clouds on the title. This is done by a title and abstract company.
The abstract is a condensed history of title to a particular parcel of real estate that summarizes the ownership dating back to the Land Run. This is performed by an abstract company. Their attorneys research the property and tax records, and prepare the updated abstract at the time of sale. Abstract companies charge based on the value of the property and the amount of time since the last abstract.
Once the abstract is updated, the title company will issue title insurance on the property. This policy insures the buyer against financial loss from defects in the title that may not have been apparent during abstracting. If problems arise from defects in the title, the title insurance company will either fix the problems or compensate the owner for losses up to the value of the policy.
Insurance
Homeowners’ insurance is something every property should have. If you have a mortgage, your lender will require coverage. Even if your home is mortgage-free you should have coverage anyway.
Homeowners’ insurance generally comes in standardized packages. For instance, the most basic form, HO-1, offers protections against fire, theft, and certain types of liability. HO-2 is more comprehensive and includes protection against damage from broken pipes, the weight of ice and snow, and broken hot water heaters. HO-3 gives more protection still. It generally includes just about everything and excludes only earth-shaking events such as earthquakes, floods, nuclear accidents, and wars.
To determine which policy is best for you, make a list of your valued possessions and the types of coverage you’d generally like to have. Then sit down with an insurance broker to review what’s included (and excluded) from each policy. You may find all the coverage you want in a general form, or you may determine that you need special coverage at extra cost.
I can recommend several local insurance agents who can help you determine the best coverage for the least cost. Insurance is available in Oklahoma from the major companies such as Allstate, Farmers, and State Farm, plus a variety of smaller specialty insurance companies.
Final Walk Through
The buyer has the right to do a final walk-through of the property usually the day before or the morning of closing to ensure all repairs have been completed and the property was left in the expected condition. This is typically just a formality, but problems can arise at the last moment due to incomplete repairs. I will participate in your final walk-through and if problems arise, I am there to help you deal with them.
Settlement Statement / Closing Disclosure
Before closing you will receive a closing disclosure from your lender. This federally required document outlines all the details about your mortgage including the interest rate, all your closing costs, insurance, taxes, and your monthly payment. You can compare this to the good faith estimate you received earlier from your lender – typically those are very close.
Finally… The Closing!
Once the inspections are complete, the title work is done and the sellers have moved out, you are ready for the closing. Typically both the buyer and the seller show up at the title company, where the paperwork is ready for signatures. The lender will provide the title company with all the documents they require you to sign. Both parties will sign the respective documents, usually privately, and when the financing is completed, you get to walk away with the keys to your new home!
Sometimes all parties are not able to attend the closing at the same time. In these cases the title company will perform a “dry closing” whereby each party signs at a different time. The transaction is only finalized when the funding is completed, which could be a day or more later.
Closing Documents
- Mortgage Contract
- Transfer Deed
- Purchase Agreement
- Addendums to contract
- Disclosures
- Truth in Lending statement
- Title insurance policy
- HUD-1 Settlement statement
