Understanding the Settlement/Closing Process
Resourceful and Skilled Professionals Work Hard To Ensure Your Closing Goes Smooth.
By Brandon G. Livingston, President Coast To Coast Title & Escrow Services
When you are going to purchase a home, the last thing you want to think about is a problem that may either hold up the closing, or withdraw it all together. That’s why it is critical you make sure you hire the right Title Company to ensure a smooth process.
The work on the back end begins as soon as the offer is accepted by the seller, which is typically about 30 to 60 days prior to the actually settlement. Here’s how the settlement process generally works.
Generally, you will be working with a real estate agent, the agent will place a “title order” with the Title Insurance Company once the contract has been excepted by the seller. In Florida, most Title Companies, like us, will act as the Settlement Agent as well. The majority of the time, the real estate agent will give you one, sometimes three, that the recommend to you. However, you have the right to choose.
Once the contract is completed, the Title/Settlement Company will collect and hold in an escrow account, the deposit, also known as earnest monies, until the time of closing.
The title/settlement agent will ensure a smooth process, and that everything necessary to close the loan without any hang ups to delay it, or even completely withdraw it, and a clear to close is given by the agents and the lending institution(s).
The title company then will begin to conduct an extensive search of the public records to make sure there are no issues with the title such as any liens that are attached to property you are purchasing. Some examples will be the mortgages, tax liens, child support liens, utility easements, etc. It is common for things to simply “pop up” that the seller didn’t even know existed, or it may have even been attached to the wrong property. Your Title Company will most of the time clear these sort of issues up prior to closing, without you even knowing that it ever existed. After the Title Company clears up any issues, we are then prepared for Settlement and the issuance of your Title Insurance Policy.
There are two kinds of title insurance coverage—a Loan Policy, which covers the lender for the amount of the mortgage loan, and an Owner’s Policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the lender will require that you purchase a Loan Policy. However, it only protects the lender. We always recommend you obtain an Owner’s Policy to protect your investment. Who pays for the Owner’s Policy is generally negotiated in the Sales Contract in Florida.
Typically, there is an existing mortgage on the property that must be paid off at the time of settlement. The Title Insurance company will order and payoff this mortgage, and insure that the payment is received and that a release of lien, or a satisfaction is recorded properly so that the lien is cleared from the property. Each Settlement is different, the process is different, and that’s why it is so important that you choose a Title Insurance/Settlement Company that is professional and efficient.
Why you ask? Because it is the Title Company/Settlement Companies job to coordinate the entire process through all parties involved.
If you are obtaining a loan, your lender will provide you with a Good Faith Estimate which basically lays out all of the fees, keep in mind that these fees are estimates and it is critical that you carefully review these fees and compare them to the Settlement Statement that you will review and sign at closing.
Once everything is cleared up on the settlement end, we are then clear to close.
Now your special day arrives, Closing Day!! You will be worn out from packing and driving yourself on pure excitement. We as your Title Insurance and Settlement Agent have worked extremely hard as well to ensure a smooth settlement, and most importantly, you can rest easy that you ARE the owner of your beautiful home.
For more information and helpful tools visit our website www.ctctitle.com or call a title rep now, we are eager to answer any questions you may have. Thank You.
Coast To Coast Title & Escrow Services