What to Expect at Closing

Ready, Set, CLOSE!

You have made your final walk through, your financing is ready, you have even made the arrangements to move, the only remaining detail is – the closing!  Here is a description of what to expect at closing.

In Tennessee we call the event of transfer of title of the home a “Closing”. Other names for this event are “Settlement” and “Escrow Closing”. At this event the Buyer and Seller sign all of the paperwork necessary to complete the transaction. If you are the Buyer then you sign the paperwork necessary to obtain the loan to purchase the property and you pay whatever the difference is between your loan amount and the purchase price plus closing costs. If you are the Seller then you sign all the paperwork necessary to convey title and you receive the net proceeds. Sometimes the Seller signs some disclosures for the Buyer’s lender.

Closing is typically held at the attorney’s office, although it may occur at your real estate agent’s office or the lender’s office, and sometimes even at a hotel, restaurant or the house itself! At closing all monies for the transaction will be paid to the title agent or attorney and he or she will, in-turn, write all the checks for the transaction; including the checks for the transfer taxes, filing fees, title insurance, real estate commissions, pay-offs for any mortgages, homeowner’s association (if applicable) and all other costs and fees – including the Seller’s proceeds. The title agent or attorney is responsible for making sure the Warranty Deed and Deed of Trust (the security instrument) are correctly completed, executed, and recorded after the transaction.

In middle Tennessee it is somewhat rare for the Buyer and Seller to sit down at the closing table together, the only exceptions are when the parties know each other well. Usually the Buyer meets with the closing agent or attorney first (for about thirty-five minutes) and then the Seller will meet to sign the rest of the paperwork (takes about fifteen minutes). More and more often the Buyer and Seller will close with separate title agents or attorneys. Those two companies will work together, as best as possible, to provide a seamless closing. It is definitely more convenient for both parties to close with the same title agent or attorney but it is certainly not necessary.

The best part about Closing is that by the time this happens, all the work to buy or sell is complete. All that is left is to sign the paperwork – and move! All people signing documents need to bring two forms of Identification according to the US Patriot Act; approved types of identification include, but are not limited to; Drivers License, ID Card, Voters Registration, Passport, Social Security Card. Buyers need to bring any documents the lender has requested as well as the balance of their purchase funds in the form of a cashier’s check or wire transfer of funds. If you are bringing a check please make it payable to McCann & Hubbard.  If you will be sending a wire, please contact your title agent for instructions. Sometimes the dollar amount a buyer needs to bring in can change a number of times before its finalized. Please make sure to contact your title agent a few hours before Closing to make sure you have the correct dollar amount.

Seller’s need to bring termite letters, septic letters, and any other documents the contract states they are to provide. If a husband or wife cannot attend closing be sure to inform the attorney of this fact as early before closing as possible; usually we can take care of this situation with a Power of Attorney (POA), however lenders have to approve a Buyer using a Power of Attorney and that takes a few days advance notice. Only a Power of Attorney provided by the closing attorney or approved by the closing attorney in advance can be accepted at closing. The original POA will need to be given to the attorney at closing and recorded with the Deed. The original will be returned after it has been recorded.

Before you leave the closing table the Buyer needs to be sure he or she knows when the first payment on the mortgage loan will be due. Be sure to keep the copies given you at closing. Approximately one month after closing the Buyer will receive the original recorded Warranty Deed and the Owners Title Insurance Policy in the mail. Be sure to put these documents with the rest of the copies to keep for future reference. If you refinance or sell within the next ten years we can give you a discount on the next title insurance policy you purchase concerning this house.

Approximately five to seven weeks after Closing the Seller will receive back any excess funds from the pay-offs or escrow accounts. Pay-offs always seem high at Closing because the daily interest accumulates through to the actual date of pay-off; which is typically a day or two after Closing occurs. If your Closing is going to occur on or before the fifteenth (15th) day of the month please do not make a payment for that month. The reason is because it takes several days for a loan payment to be processed and your lender might not even realize you have just made a payment. If you have made a payment and then close within a few days there is a strong chance the pay-off amount will not be accurate.

At our firm we strive to give you the best service at the fairest price. Our attorneys are involved in the entire process, from receipt of the Contract, to title review, to processing the documents, to Closing. We pride ourselves on finding and resolving issues before they become problems. We are certain you will be pleased with our services and we look forward to seeing you soon!