Smart FAQs on the Closing Process
What Is the Role of the Settlement Company?
A title company makes sure that the title to a piece of real estate is legitimate and then issues title insurance for that property. Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title. Through research, insurance and careful coordination, they make sure that the title to a piece of property is transferred legally and correctly from the seller to the buyer.
What Does the Closing Process Look Like?
The closing process typically entails the following:
- The sales contract is ratified and sent to the title company to begin processing the transaction, also known as a “title order”.The buyer’s mortgage company (referred to as the lender) will also send the settlement company a “title order”, which will include the loan borrower’s information and the lender’s requirements.
- The settlement company orders a title search, property survey , the seller(s)'s mortgage payoff statements, real estate tax information, HOA payoff, and transfer information, etc.
- The settlement company works with all parties to obtain all the information in order to “clear title” for transfer and sale.
- On the day before or the day of closing, the lender will send the final documents and instructions to the closing agent.
- The closing agent will prepare the final settlement statement and conduct the closing
- During closing, the agent will review all of the documents and obtain signatures
- After the documents have been signed and confirmed, the lender will release funds to the appropriate parties.
Who Chooses the Settlement Agency in a Transaction?
The buyer/purchaser has the legal right to select a title company of choice.
What if I'm Not Able to Physically Attend Closing?
Typically the closing will be scheduled around a date and time most convenient for you. In the event that you cannot attend closing there are a few options: You can give someone a power of attorney to sign on your behalf or have the documents sent to you and send the originals back completed and signed. If you are financing your purchase, the second option might be difficult to accommodate.
Related: Learn more about e-Closings at Smart Settlements or see if your county participates.
When and How Will I Receive the Proceeds From My Sale?
In Virginia by law, the proceeds from the sale must be sent within two business from the date of closing. We are able to transfer funds by wire, mail a check or a check can be picked up from our office. In Maryland and the District of Columbia, funds are typically disbursed the same day as closing after all parties have signed the documents, unless settlement occurs after hours or outside of the office.
What Is a Closing Disclosure?
This form is a federally mandated document providing a detailed statement of the breakdown of costs involved in a real estate transaction.
Related: Requirements for Residential Property Disclosures
What Steps Should I Take if I Want Smart Settlements to Handle My Real Estate Closing?
Simply send your signed formal contract to orders@smartsettlements.com.
What Documents Will I Be Expected to Sign at Closing?
You will be required to sign several documents at the time of closing. In the majority of closings, the lender prepares and delivers the documents to the closing agent the day before or day of closing. While the many documents are simply disclosures or notices, some documents are legally binding. These will be reviewed in detail with you by the closing agent.
What do I Need To Do To Prepare For Closing?
Once our office receives the completed contract, we will begin the process of conducting a title search and coordinating settlement with your lender. If you have not already scheduled a date and time for your settlement convenient to all attendees, please call 202-753-7400, you may message us through the client portal, or have your real estate agent coordinate closing with us. Be sure to bring to closing:
- Government-issued photo ID (driver’s license, state ID, passport);
- Final closing amount in certified cashier’s check if you did not wire your funds prior to settlement;
- Any legal documents such as Power of Attorney, specific trust documents or LLC documents that the attorney or processor requested.
If you have not already received your final amount, please call our office one day prior to closing and we will provide you with the dollar amount you will need to bring to settlement. In the event we do not have figures from your lender and cannot provide you with an exact amount, you may refer to the closing disclosure provided by your lender and use a personal check for any remaining balance due, up to $2,000. Please make checks payable to Smart Settlements.
Related: Smart Settlements Post-Closing FAQs
For additional information on this topic contact Evelyn Miller, Partner, at 202-753-7400.
