In a real estate transaction, a closing is a final procedure in which documents are executed and the sale or loan is completed.

 

The Closing Process:  This process begins upon the receipt of an Earnest Money Contract.  This is a binding contract that sets forth the terms fo the sales transaction between buyer and seller.  Usually earnest money if requested when an Earnest Money Contract is executed.  Once the contract has been turned over to a closing agent with the escrow comppany, the "escrow officer," that agent will begin the title search on the property.  A title insurance commitment document will be issued to the purchaser and/or lender showing any encumbrances to the property (obstacles to transferring "clear" title, which is basically "full ownership.")

 

The Closing:  The lender will issue closing instructions to the closing agent.  The agent will prepare a closing statement.  A closing statement is the itemization of charges in connection with the sales transaction.  The closing agent will verify that all terms of the contract have been met and the transaction is ready to be closed.  At this time, the buyer and seller will execute all legal documents.  Once all documents have been signed, they will be held in escrow until funding occurs.  Ownership is only transferred upon funding, not upon signing. Documents are recorded with the County Clerk's Office.  Once all required documents are recorded, a Title Insurance Policy will be issued to the purchaser and the lender if applicable.

 

The Funding:  Since funding (permission to spend THEIR money) is such an important part of the closing process, it is also important to know that without funding authorization from the lender, the Title Company cannot disburse the money.  Until funding is complete the Deed and all loan documents will be held in escrow.

 

Anna Gonzales is a Business Development Representative for First American Title Champions Branch.  She has worked as an escrow officer and rep for the past 9 years.  If you need further assistance with your real estate transactions please call 713-248-5943. She writes for Will & Allen REALTORS(r) and for Lelda Will Properties, as well as various industry related websites.