✓Title Examination ✓Requirements of the Parties ✓Preliminary Closing Package ✓HUD 1 ✓Final Closing Package ✓Closing ✓Recording & Disbursement
Real estate settlement, sometimes referred to as a closing, is the process of finalizing the sale of property by transferring title from seller to buyer, while simultaneously recording the transaction and the financial interests of lenders in the public records office of local government. For the average home buyer, this is little more than a meeting to sign documents, deliver money and pick up the keys to a new home. In reality it is a great deal more.
Once you have contracted for a new home, the process begins. First, a thorough title search is done by researching the public records regarding the property. The title examiner is looking for any restrictions or claims that exist on the property that will have to be addressed prior to closing. At the same time, the purchaser and the purchaser's lender, insurance company and others establish their own requirements to close. The settlement company is charged in making sure all parties objectives are met prior to closing.
Next comes a preliminary closing package. This is when the settlement agent sends all collected information to the lender for review. A HUD 1 or settlement statement follows, which looks similar to the good faith estimate provided by your lender. This document finalizes all the financial elements of the closing. A final closing package is completed and closing occurs.
At the time of closing, your closing agent will explain the documents, witness your signature and collect any money you may owe. Finally, the purchase is recorded at the appropriate courthouse and all money is disbursed according to the terms of the contract.
