What Happens Before Closing?

What happens before closingAs the final step in the process of buying or refinancing a home, the closing is a fairly simple yet important process. It requires lots of paperwork, signatures and a meeting with your real estate agent, title company representative and any attorneys involved.

Closing is the act of officially gaining ownership of a property. A closing also occurs at the end of a refinance, typically with fewer parties involved.

But what happens before the closing? What happens behind the scenes as the title company conducts the title search on your house and prepares the documents for the closing?

To prepare for the closing, the title company will issue a title commitment. A title commitment is the promise from the title company to the buyer that at closing it will produce the final policy. The final policy will guarantee the buyer safety against any title defects.

Once the title commitment is issued, a title processor will look at the requirements on the commitment. The processor begins an investigation into the seller’s history with the property, looking for open liens, judgments or deeds. He or she looks for anything that would be considered a “title defect” and affect the property purchase.

For example, if the seller has been through a divorce, the commitment will reflect if there are any payments required that are associated with the divorce and if a deed is needed from an ex-husband or ex-wife. The processor will also verify that Property Owner’s Association dues are current, if the property is in a subdivision with a Property Owner’s Assocation. Through these steps, the processor makes sure that the seller is fully and legally capable to sell the house to the buyer, thereby ensuring the final policy’s guarantee is good.

Capstone Pioneer begins the process as soon as it receives the order, so when the commitment is issued, the file is clear to close as soon as possible. Although the actual closing itself won’t take that much time (about an hour), there is at least a week’s worth of preparation to ensure the closing goes as smoothly and efficiently as possible.

If you are interested to learn more about the closing process, be sure to download our free ebook on closing by click the button below.

 

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