Closing Tips

5 Steps to the Home Closing Process

  1. Once the buyer and seller have signed a sales contract, Ability Title will begin a title order. Tax information, inspections, surveys, loan payoffs, and other legal requirements will be ordered during this step.
  2. Next, the legal owner of the property will be determined, and any outstanding liens or assessments will be checked. During this step the search of the entire history of a property will be done to insure the deed will transfer without any problems or interference.
  3. Ability Title will then review all legal and loan documents in order to assess charges and prepare the closing statements. A closing date will then be set after this step is complete.
  4. At the closing, both the buyers and sellers will sign all of the necessary paperwork. Sellers sign the deed and closing affidavit, and when financing the home, buyers will sign the mortgage and loan agreement. Prior loans on the property are paid off and the real estate agents will be paid for their services
  5. Following the closing, all required transaction documents will be sent to the county recorder’s office and the title insurance policies will be sent to the lender and the buyer.

Closing Terminology

  • Chain of Title: A historical analysis of the transfer of title to a piece of property over the years.
  • Clear Title: A title that is free of liens or legal questions as to the ownership of the property.
  • Closing: A meeting where all of the closing documents are signed and money changes hands concerning a purchase, sale, or loan.
  • Closing Costs: Closing costs are separated into what are called “non-recurring closing costs” and “prepaid items.” Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. Prepaid items recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Closing Disclosure, which they must issue to the borrower within three days of receiving a home loan application.
  • Cloud on Title: Any conditions revealed by a title search that adversely affect the title to real estate. Usually, clouds on title cannot be removed except by deed, release or court action.
  • Deed: The legal document conveying title to a property.
  • Deed-in-lieu: Short for “deed in lieu of foreclosure,” this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and becoming a matter of public record.
  • Easement: A right-of-way giving persons access to or over a property.
  • Eminent Domain: The right of a governance to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.
  • Encroachment: An improvement that intrudes illegally on another person’s property.
  • Encumbrance: Anything that affects or limits the simple title to a property, such as mortgages, leases, easements or restrictions.
  • Escrow Account: Extra Money held in an impound account for the payment of items like property taxes and homeowners insurance for when they become due. The lender pays them with your money instead of you paying them yourself.
  • Examination of Title: the report on the title of a property from the public records or an abstract of the title.
  • HUD-1 Settlement Statement: A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow accounts. Each type of expense goes on a specific numbered line on the sheet. The total at the bottom of the HUD-1 statement defines the seller’s net proceeds and the buyer’s net payment at closing. The HUD-1 is also known as the “closing statement” or settlement sheet.”
  • Title: Individuals who will have legal ownership in the property are considered “on title” and will sign the mortgage and other documents

Links

Volusia County Property Appraiser Record Search

Clerk of the Circuit Court, Volusia County

Home Closing 101