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What to Expect at the Real Estate Closing

A real estate "Closing" is the procedure by which the title to the property is transferred from the seller to the buyer. If a loan has been obtained, the buyer will sign the lender`s required documents and they will be executed at the closing. 
Since Georgia is an "Attorney State," the closing must take place under the direction of an attorney who represents the lender. The closing attorney`s role at closing is to represent the lender`s interest not to provide legal advice to the buyer nor the seller. It is always an option to have your attorney with you at the closing, but most people in Georgia do not feel the need. You should consult with your own attorney, if you feel legal advice is needed.

Before the Closing - BUYER

? Decide whether you want to order a survey. In most instances it is not required by the lender but is recommended. Your title insurance company may place limitations on its Lenders Title policy coverage if you do not have a survey.

? Obtain Homeowners Insurance and provide proof of intended coverage prior the closing. This must show the lender as loss payee. Have your insurance agent contact our office and we will be glad to supply them with the pertinent information needed.

? Plan to purchase Owner`s title insurance in addition to Lender`s title insurance, to protect the equity you have in your property. Closing attorneys routinely have the cost added in on the Settlement Statement. If you do not wish to have this additional coverage just advise the attorney at the closing and they will remove it from the total fees needed to close.

? If the terms of the contract have changed, your agent should insure that the closing attorney is made aware of the changes. This may affect the loan amount or fees that will need to be adjusted. All disputes regarding contract terms, price negotiations and repairs must be handled before the closing. 

? The closing attorney`s office or your agent should advise you on the approximate amount of funds needed at the closing. Every effort is made to provide an accurate amount needed to close the transaction, but note that a "Good Faith Estimate" is merely an "estimate" and may not include some items that appear in the final calculation, such as owner`s title insurance, homeowners dues, adjustments to the per day pre-paid interest, funds needed for the escrow account and other fees. 

? Contact your real estate agent for any final details that need to be worked out prior to the closing.

 


At The Closing - BUYER


For a typical closing, plan on spending about one hour`s time with the closing attorney.

        • Bring photo identification
        • Bring certified funds or a cashier`s check made payable to yourself which will be endorsed over to the attorney at the closing. If it is made out for too much the attorney will refund the overage. If it is not enough you may write a personal check for the difference. You may have the option to wire the funds to the attorney`s account. However, verify that this method of payment is used first.
        • Bring the original Hazard Insurance policy Declaration page and the receipt indicating that it has been paid in full
        • You may also need to bring other items required by the lender.
        • All parties will review of the HUD-1 Settlement Statement detailing costs and make any adjustments if necessary.
        • You have a right to read all of your closing documents before you sign. The closing attorney will give you concise explanations of each document. The closing documents must be executed as written. No changes may be made to the wording of the lenders closing loan documents.
        • A review of the termite clearance letter obtained by the seller indicating that the letter is not more than 30 days old and verifying that no active infestation was found and no structural inspection was required.
        • The disbursement of the proceeds of the transaction and a payoff of all current liens against the property.

     

    At the Closing - SELLER

    The following is a list of the most common documents that the Seller will be required to sign at closing:

    • The Settlement Statement (also called "HUD - 1"): Itemizes the fees paid by both the Buyer and the Seller and gives the bottom line figure due to/from each party.
    • Closing Affidavit: A statement certifying that the Seller is the true and lawful owner of the property, that there are no liens against the property other than those disclosed, and that there are no other matters which would adversely affect title to the property. This affidavit also includes acknowledgment by the Seller that taxes have been prorated between the parties using the best available information. If when the actual tax bills are released, the amount differs, then there will be a recalculation of the tax proration.
    • Compliance Agreement: An agreement to be executed by both parties regarding typographical errors and any additional requirements to be met after closing.
    • Warranty Deed: The document which is recorded in the Public Records and transfers legal ownership of the property.
    • 1099-S Exemption Form: States that the criteria exempting the requirement for reporting to the IRS have been met; if this is not the case, a 1099-S form will be issued. Please note: each transaction is different, and as such, additional documentation may be required.

     

    Lender`s Documentation

    Each Lender will have different documents for the Buyer to sign; however, almost all residential loan packages will contain the following:

    • Note: The promise of the Borrower to repay the loan, and the basic terms of the repayment.
    • Mortgage: The document which is recorded in the Public Records granting the lender a lien on the property to secure the loan. This document gives the lender the right to foreclose if the Borrower defaults on the Note.
    • Truth-In-Lending Statement: A required disclosure to the Borrower stating the annual percentage rate (this rate contains the fees charged by the lender and adds them to the note rate) and the total cost of the loan over its life.
    • Anti-Coercion Statement: An acknowledgment from the Borrower that the lender did not require the homeowner`s insurance to be purchased from a particular company.
    • IRS Forms W-9 and 4506: The W-9 enables the lender to report the interest paid annually to the IRS; the 4506 is used in the event of an audit by HUD and allows the lender to obtain copies of tax returns directly from the IRS.
    • Payment Letter: Gives the amount and due date of the first payment.
    • RESPA Servicing Disclosure: Discloses to the Borrower that the lender has the right to transfer the loan on the secondary market.
    • HUD - 1 Addendum: A statement that the HUD - 1 Settlement Statement is a true, accurate, and complete statement of the transaction.
    • Loan Application: A typed copy of the Borrower`s Loan Application
    • Correction Agreement: An agreement by the Borrower to correct clerical or typographical errors.

     

    After the Closing


    To complete the closing of the transaction, the attorney will do the following:

    • Record in the county land records all documents such as the warranty and security deeds.
    • Return to the lender the completed loan package.
    • Disburse all funds in accordance with the HUD-1 Settlement Statement.