A lot goes into the closing of a real estate transaction. However, often buyers and sellers aren’t fully aware of just what a title closing company does during the time leading up to closing.
Where it begins: Purchase Agreement or Title Application
The work for us begins after the offer is accepted and the purchase agreement is signed. The real estate agent might start the ball rolling by sending the signed purchase agreement to a title processor at a title closing company or the loan officer might send a title application to the closing company of their choice.
Title Search Begins: Title Processor Enters Order
The title processor then opens an order and assigns a file number. Next the assessment search, an independent property search, and a plat drawing of the property are all ordered.
Digging Deeper: Abstracting
The abstractor searches county records for deeds transferring title, mortgages, satisfactions, judgments, and any other liens against the property or person selling. These documents are then sent to the examiner for review.
Verifying Chain of Title: Examiner
The examiner reviews each recorded document thoroughly, searching for anything that may create an encumbrance or a cloud on the title in question. Then they create and send the title commitment to the processor. If necessary, the examiner will include instructions as to how to clear title for the new buyer and to ensure first lien position for the new lender.
The processor makes any necessary corrections to clear any clouds on the title. Once clear, they schedule the closing with the buyer, seller, their agents, the buyer’s lender, and other title company then once confirmed closing notices are sent out to all involved parties. Next, the Title Processor prepares the closing documents and gathers all pertinent information for the closing. Then the processor enters the fees and creates a settlement statement and sends it to the lender/agent for review. The loan will be clear to close once the settlement statement is approved by the lender. Lastly, the processor receives the loan package from the lender on the day of closing.
This is when the documents are signed. The closers explain each document to the buyer and the seller before they sign and will also notarize signatures where necessary. Once all signing is complete and funding approval is obtained, the closer cuts any checks and disburses the funds. If any invoices remain unpaid, the closer mails a check to satisfy them and at this time they will also wire or send out the seller’s current payoff. Next, the closer prepares and sends the package of executed documents, back to the lender. Lastly, they prepare and send the file to the recording department.
At this stage, all documents are reviewed by the title company’s recording department for accuracy, including the deed, mortgage, and any other documents that are to be recorded. Once the review is complete, the department sends the documents to the county for recording.
After the recorded documents have returned from the county, the title company will issue and send out a lenders and owners title insurance policy.