For many people, closing on the sale of a residence is one of, if not the biggest transaction of their lives. The process involves multiple steps, a variety of people, and may seem to come with a confusing array of documents, requirements and actions. Before getting to the closing, there is a lot of work – and paperwork – to do. Here is a little bit more about what happens.
Step 1: The Offer
Often prepared in a pre-written, standardized form, the buyer’s agent prepares an “offer” to the seller by submitting a draft contract that the buyer is proposing for the sale of the property. These forms will include a variety of terms and conditions, including the “contingencies” like home inspection or financing. Often, this offer also names a title agent to serve as the closing company for the sale.
Step 2: Ratification of the Contract
The parties can negotiate the terms of the contract. Once they are finalized, the parties each need to sign – or ratify – the contract. At this point, the buyer’s agent notifies the selected settlement company about the transaction. Early is best, but sometimes the buyer’s agent will wait for the home inspection to notify the closing company.
Step 3: Title Search
The first job for the settlement company is the title search. This involves checking to make sure that the seller is the actual owner of the property and that the property can be sold to the buyer. It also makes certain that there are no limitations on the property such an liens, easements or other restrictions on a free and outright ownership by the buyer. A title search is conducted through the public record, so be sure to use a closing company that is familiar with the area, and know how to dig up all the relevant information!
Step 4: Key Coordination Efforts
A good settlement company is the hub of the wheel, collecting all the information, documentation and parties necessary to complete the sale. The spokes on the wheel include agents, inspectors, warranty agents, lenders, and the county court house or recorder’s office. Each of these spokes has a job to do in the process of finalizing the sale, and it is the settlement company that coordinates it all. The settlement company is the clearinghouse for all the paperwork. It is also managing the flow of money, making sure of the accurate amounts needed to pay the seller, to pay off mortgages, and to pay the various other people involved in completing the transaction.
Step 5: The Closing
By the time of the closing, when the parties come to the settlement, all the work should be completed to finalize the transaction. The only thing left to do is sign a significant number of documents – a collection of all the efforts put together in the prior steps. A good settlement agent will work with the parties to make sure this step goes as smoothly as possible, offering as much or a little support as necessary. Some parties want a detailed explanation of the documents, while others want a concise, quick procedure. At Cobalt, we serve the client, so the closing will proceed how you want it to go. Once signatures are made, the closing company files the new deed with the county recorder, the funds are disbursed to the parties entitled to proceeds, and the buyer, having received the keys, is now in possession of the house. Congratulations!
Want to make sure that you close with confidence? Contact Cobalt today to find out more about how to work with us on your next transaction.
Cobalt is a locally owned, independent title and settlement company, headquartered in Arlington, VA. We are homeowners just like you. Whether it be custom, spec home – new construction, previously owned, a lot purchase, single-family, condo, or townhouse, we have done it too. We know what it takes to get through this process successfully. We pay attention and watch the details to protect you in insuring and closing on your dream. It’s the Cobalt Way, we believe in being the best, not necessarily the biggest. We specialize in real estate closings in Virginia and the District of Columbia.