Real Estate Closing: What to Expect & How to Prepare

The property closing process is a critical step in any real estate transaction. It’s when the legal transfer of ownership takes place, solidifying the agreement between buyer and seller. While it might seem daunting, understanding the process can help ensure a smoother experience. Having legal representation throughout this process is highly recommended to protect your interests and address any potential issues.

Pre-Closing Preparations

Title Search: A title search involves examining public records to verify that the seller has clear ownership of the property and there are no outstanding liens, claims, or encumbrances. This ensures that the buyer is acquiring a clean title, free from any legal issues that could affect their ownership rights.

Financing: Before closing, buyers need to have their financing in place. This could involve securing a mortgage from a lender or using cash to purchase the property.

Property Inspections: Home inspections and other property assessments are essential to identify any potential issues or defects with the property. This can help buyers negotiate repairs or credits before closing or make informed decisions about the purchase.

Disclosures: Sellers are required to provide disclosures about the property to buyers. These disclosures can include information about known defects, environmental hazards, or any other relevant details that could affect the property’s value or condition. Buyers should carefully review these disclosures and consult with their attorney if they have any concerns.

Closing Day Preparations

Document Review: Gather all necessary documents, including identification, proof of funds, and any required disclosures. A thorough review of these documents can help ensure that everything is in order and that there are no missing or incomplete items.

Escrow Account: An escrow account is a crucial tool in the closing process. It holds funds until the closing is complete, ensuring that all parties are protected. The escrow agent, a neutral third party, oversees the disbursement of funds and ensures that all conditions of the sale are met before releasing the funds.

Closing Costs: Be prepared for closing costs, which can vary depending on the location and complexity of the transaction. Common closing costs include:

• Title Insurance: Protects the buyer and lender against claims to the property’s title.

• Appraisal: An assessment of the property’s value to ensure that the loan amount is appropriate. 

• Recording Fees: Fees paid to the local government to record the deed and mortgage.

• Attorney Fees: Legal fees for representing the buyer and seller in the transaction.
• Transfer Taxes: Taxes imposed by the government on the transfer of property ownership.

It’s important to understand the specific closing costs associated with your transaction and who is responsible for paying them. Your attorney can provide you with a detailed breakdown of these costs.

The Closing Process

Signing Documents: On closing day, both buyer and seller will engage in a series of document signings. These documents are essential to finalize the transaction and transfer ownership of the property. Some of the key documents that may be signed include:

• Purchase Agreement: The original contract that outlines the terms and conditions of the sale.

• Deed: The legal document that transfers ownership of the property from the seller to the buyer.

• Mortgage Documents: If the buyer is financing the purchase, they will sign mortgage documents, such as the promissory note and mortgage deed. 
• Other Closing Documents: Additional documents may be required depending on the specific circumstances of the transaction, such as affidavits, title insurance policies, and closing statements.

Transfer of Title: Once the necessary documents have been signed, the deed is recorded with the local government. This officially transfers ownership of the property from the seller to the buyer. The recorded deed becomes a public record, establishing the buyer’s legal rights to the property.

Disbursement of Funds: After the documents are signed and the deed is recorded, the escrow agent will disburse the funds held in the escrow account. The funds will be distributed according to the terms of the purchase agreement and closing statement. This typically involves transferring the purchase price to the seller, paying off any existing liens on the property, and covering closing costs.

Recording the Deed: The deed is recorded to establish a public record of the ownership change. This ensures that the buyer’s ownership rights are protected and that any future transactions involving the property are properly recorded.

Post-Closing Steps

Mortgage Recording: After the closing is complete, the lender will typically record the mortgage with the appropriate government office. This creates a public record of the lender’s lien on the property, securing their interest in the property as collateral for the loan.

Property Insurance: It’s essential to transfer the property insurance policies to the new owner. This ensures that the property remains adequately protected against potential losses or damages. The buyer should contact their insurance provider to update their policy information and make any necessary changes.

Utilities and Services: The new owner will need to arrange for the transfer of utilities and services to their name. This typically involves contacting the utility companies and providing them with the new address and account information. It’s important to schedule the transfer of utilities in advance to ensure uninterrupted service on the closing day.

Possession: Once all closing conditions are met and the funds have been disbursed, the buyer will take possession of the property. This means that the buyer can move into the property and begin enjoying their new home. However, it’s important to note that the seller may have a grace period to vacate the property, as specified in the purchase agreement.

The property closing process can be complex, but understanding the steps involved can help alleviate stress. Having a qualified real estate attorney guide you through this process can ensure a smooth and successful closing.

Contact Weiner, Shearouse, Weitz, Greenberg & Shawe if you have any questions or require legal assistance with your real estate transaction. We have offices in Savannah, Richmond Hill, and Bluffton, South Carolina.