For a buyer, after their offer is accepted and the purchase agreement is signed by both parties, it is a matter of hurry up and wait. However the closing of a real estate transaction is a complex process, and many buyers don’t know all of what goes on behind the scenes of a purchase. At Liberty Title we believe in keeping our clients informed, so here we walk through each step of the process and what happens at each stage.
Purchase Agreement or Title Application
Either the real estate agent sends the signed purchase agreement, or the loan officer sends the title application to a title processor at the buyer’s selected title closing company.
Title Processor: Order Entry
Next, the title processor opens the order and assigns a file number. Then they order the assessment search and plat drawing of the property.
The abstractor then searches county records for deeds transferring title, liens, mortgages, or judgments against property or person selling. They send these documents to the examiner for review.
The examiner reviews each recorded document thoroughly, searching for anything that may create encumbrances 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 so ensure first lien position for the new lender.
The processor clears any defects on the title and schedules the closing with all parties involved including the real estate agents, lender, buyer, seller, and other title company. They send all these parties closing notices. The processor receives a loan package from the lender on or before the closing date. The processor then enters all the fees and creates a settlement statement to send to the loan officer and agent for review. Once that’s approved, the loan is clear to close.
This is when the documents are signed. The closer explains each document to the buyer and the seller and notarizes all signatures. They also verify funds from the lender and, if necessary, obtain funding approval. Once all documents are signed, the closer cuts checks and disburses them. Next, the closer will prepare and send the signed package of documents according to the lender’s instructions. If there are any unpaid invoices, the closer mails the checks. They’ll also wire or send out payoffs. And finally, they prepare and send the file to the recording department.
At this stage, all documents are reviewed for accuracy, including the deed, mortgage, and any other legal document. Once the review is complete, the department sends to the county for recording. If any documents are rejected, they handle a correction and return to the county.
After the recorded documents are returned from the county to the title company, lenders and owners policies are each given a policy number. The policies are created and sent to the appropriate parties.