Services

Real Estate Closing

Let's start at the very beginning — what does "closing," "settlement," or "closing escrow" on your house mean?

Closing – or settlement as it is known in some parts of the country — is a term used for the point in time at which the title to the property is transferred to the buyer and, generally, a mortgage (or "deed of trust") is given by the buyer/borrower to the lender.

Buying a house is an exciting time and the more you know about the process, the more relaxed you'll be going through it. Keep reading, and we'll walk you through what the closing process really means.

Some information about the costs associated with closing on your home should be provided to you before you put a contract on a house. If you are obtaining a loan to purchase the property, your lender has three days from the time of the loan application to provide you with a Good Faith Estimate of your loan costs so there are no surprises about costs. Within those three days you should also receive a copy of the booklet, "Buying Your Home," which outlines the settlement process. If these two things do not occur, talk to your lender.

Once the seller accepts your sales contract, the countdown to closing begins. Timing is essential to make sure all the ingredients for a successful closing are in place for your arrival. Elite Title will handle the entire closing process. If you have given the seller an earnest money deposit, the escrow agent, settlement agent, or real estate broker, will see that it is promptly deposited into an escrow account where the funds are held until the time of closing.

Next, the Elite Title will request preliminary title work. A Elite Title's professional will search and examine the public records for information related to your home's title. This provides warnings of title flaws that must be dealt with before the property can change hands. For instance, the previous owner may have failed to pay local or state taxes. Or there may be an outstanding mortgage or judgement on the property. Elite Title works hard to see that such obligations are dealt with and resolve any issues they find well before you go to closing, if possible. If the sales contract calls for a prior mortgage to be paid off, the we will order payoff figures from the existing lender. If the buyer is assuming the loan, the we handle that as well. Elite Title will, if directed to do so, also may order property inspections and termite reports. We may also order a survey if needed.

Finally the settlement agent is ready to prepare the HUD-1 Settlement Statement. The HUD-1, as it is referred to, outlines all of the costs for both the buyer and seller associated with the closing. You can download a copy of the HUD-1 form to see all of the items listed on the form.

On closing day, the property will be transferred from the seller to the buyer. You will sign a number of documents that will be explained by your settlement agent. Once all of the signing is done, the house is yours! Congratulations on achieving the American Dream!

You should be generally aware that the behind-the-scenes process continues after the closing. The settlement agent still must forward payment to any prior lender, pay all the other parties who performed services in connection with your closing, pay out any net funds to the seller, and order a final search of the title to your new home before finally recording all the documents needed legally to complete your purchase. But you don't have to be involved in any of this. Your settlement agent takes care of these post-closing details!

Common Title Problems

Errors or Ommissions can and do happen in Deeds
Lets Face it...we are all human. A clerk can make mistakes while entering data in the Deed book.

Mistakes in Examining Records
During title searches in the past, items could have been missed.

Forgery
Invalid documents could have been filed in the past.

Undisclosed Heirs
Property could have been willed to an individual

Why Title Insurance

When you purchase your home, how can you be sure that there are no problems with the home's title and that the seller really owns the property? Problems with the title can limit your use and enjoyment of the property, as well as bring financial loss. That is what a title search and title insurance are for.

The Title Search

After your sales contract has been accepted, a Elite Title Co. LLCwill search the public records to look for any problems with the home's title. This search typically involves a review of land records going back many years. More than 1/3 of all title searches reveal a title problem that title professionals fix before you go to closing. For instance, a previous owner may have had minor construction done on the property, but never fully paid the contractor. Or the previous owner may have failed to pay local or state taxes (See below for some other common title problems). Title professionals seek to resolve problems like these before you go to closing. What happens if a problem arises after you move in?

The Owner's Title Policy

Sometimes title problems occur that could not be found in the public records or are inadvertently missed in the title search process. To help protect you in these events, it is recommended that you obtain an Owner's Policy of Title Insurance to insure you against the most unforeseen problems.

Owner's Title Insurance, called an Owner's Policy, is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you or your heirs have an interest in the property. Only an Owner's Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include:

Errors or omissions in deeds
Mistakes in examining records
Forgery
Undisclosed heirs
An Owner's Policy provides assurance that Elite Title Co.,LLC will stand behind you — monetarily and with legal defense if needed — if a covered title problem arises after you buy your home. The bottom line is that Elite Title Co. LLC will be there to help pay valid claims and cover the costs of defending an attack on your title. Receiving an Owner's Policy isn't always an automatic part of the closing process, and is paid for by different people in different parts of the country. Be sure you request an Owner's Policy and ask how it is paid for where you live. No matter who pays for the Owner's Policy, the fee is a one-time fee paid at closing. The Owner's Policy protects you for as long as you or your heirs have an interest in the property.

You also have the option of purchasing a policy with expanded coverage. It's called the Homeowner's Policy and it covers more things than the Owner's Policy. Ask Elite Title, Co. LLC for an explanation of the expanded Homeowner's Policy so you can decide which policy is the best one for you.