Resources for Buyers
Building The Future Together
Henry Ford once said,
Steps For A Successful Home Closing
The cliché that Buying a Home is the single biggest investment a person will ever make in their life is really true. Being involved in your transaction can help to make the process run smoothly during and after your closing. Stay in touch with your realtor, lender and title company. You can rely on their expertise and guidance to assist in a timely closing. Take time prior to and during the closing to make sure the important paperwork reflects your understanding of the transaction. Below are important matters to pay special attention to at your closing–and beyond.
- Review the title insurance commitment.
A title insurance commitment is a preliminary insurance binder that lays out the requirements for the title insurance company to issue clear and marketable title. You can review to verify the information is correct and if there are any easements or restrictions found on the property.
- As your closing date approaches, talk to your realtor, loan officer and title company contact about your closing and what to expect.
Ask questions and be informed about the process.
- Make time in your schedule to be at the closing.
It is important to attend your closing to be able to understand the documents you are signing as well as to ask questions. Allow yourself the opportunity to clearly understand all the details and financial commitments that take place. It is difficult to know what is going on, particularly last-minute changes, when someone is trying to explain it to you over the phone, rather than in person.
- Make sure that you understand all the charges and credits on the closing statement, especially the real estate taxes.
The taxes will be handled in a variety of ways depending upon the time of year and the terms of your Purchase Agreement. The seller’s obligation for taxes usually ceases at closing, so ask the closing agent to explain to you how payments and credits are being handled.
- Make certain that the interest rate and terms in the Promissory Note are what you expected.
- Review the seller’s deed to you.
Make sure your name(s) are spelled correctly and that the deed vests title in the manner you want – tenants by the entireties (husband and wife), tenants in common or joint tenancy with rights of survivorship. Ask for these terms to be explained if you do not know. The title company cannot practice law and give advice, but its representative can explain what each form of ownership means. Each has different legal significance.
- Review the survey.
Locate the easements, fences, possible encroachments, etc. Keep your survey in a safe place; having a copy may save you money if you sell or refinance later.
- A couple of weeks after your closing, file with the County Tax Assessor any real estate tax exemptions such as homestead that you’re eligible for.
Failure to file can result in significantly higher property taxes.
- A few weeks after closing you will receive your Owners Title Insurance Policy and recorded deed from Mason Title.
Keep these documents in a safe place. The title policy, in addition to providing you the insurance protection as stated therein, may provide you with a significant premium discount if you refinance or sell.
What Buyers Should Bring and Do Prior to Closing
- 2 forms of Identification: At least one government pictured ID, like a driver’s license
- If needed, original documents required for closing by the parties involved in the transaction.
- Verify wiring instructions for security purposes.
- Ensure funds have been wired before closing.
- Electric, water/sewer, cable have been scheduled to be turned on the date of closing.
Documents Typically Signed By Buyer At Closing
Closing, or settlement, is the completion of the real estate transaction. The parties gather at the title company office, or before a notary if closed remotely, to execute all required documents and deliver all required funds. The settlement agent disburses funds as set out on the Settlement Statement.
Below is a list of the documents a buyer might sign at closing when a lender is involved.
- Closing Disclosure or CD sets out all receipts and disbursements made by, on behalf of, or to the buyer and seller in the loan transaction. If the transaction is cash, an ALTA Settlement Statement will be used.
- Promissory Note: outlines the terms of the loan including interest rate, term, maturity date, principal and interest payment amount, late penalty, and prepayment penalty.
- Mortgage: secures the property as collateral for the loan.
- Loan Application – standard form which reflects the income, assets, debts and other pertinent information used to qualify borrower for the loan.
- IRS form W-9 – verifies the borrower’s social security number for the reporting of payment of interest to the IRS.
- IRS forms 4506 and/or 8821 – authorizes the lender to obtain information from the IRS to verify information on application form.
- First payment letter – shows total payment amount, date of first payment and information regarding where to remit payment.
- Affidavits: Where applicable, buyer executes sworn statements relating to:
- owner-occupancy of the property.
- same name affidavit–name variations or “aliases”;
- the non-existence of secondary financing unless pre-approved by primary lender;
- current employment and income;
- truth and accuracy of all information supplied to the lender;
- agreement to co-operate in correcting minor documentation errors if discovered later
- other matters specific to the particular transaction
The Earnest Money Deposit
Earnest money, or good faith deposit, is money you put down to demonstrate that you have the intention of purchasing the property. You will deliver the deposit when signing the sales contract. Sellers want the buyer to provide earnest money deposit when the offer is accepted because it shows the buyer’s seriousness regarding the purchase. In exchange, the seller will take the property off the market as the transaction moves toward closing. The amount of the earnest money deposit can vary depending on the price of the sale as well as the state of the real estate market. If you are working with a real estate agent, they can guide you in the amount to deposit.
Mason Title & Escrow handles millions of dollars for hundreds of real estate settlements every month, and our primary goal is to preserve the integrity of the escrow accounts, which contains other people’s money, including yours. We have adopted funding practices designed to protect everyone’s money while assuring a smooth closing.
If you are required to bring money to a closing or receive money after a closing, here are our requirements and procedures, designed to further the goals of smooth closings and protection of the funds.
- Disbursements cannot occur until all the money necessary to fund the file is in Mason’s escrow account, at a minimum in the form of Good Funds as defined by Florida law.
- Wire Transfer is the preferred method of receiving funds necessary to close. This is the safest way for all parties to transfer funds in the large amounts required. If a wire transfer is not possible, cashiers check will be accepted, upon verification of funds with the issuing bank.
- Personal Checks cannot be accepted except for minimal amounts of $100.00.
- Earnest Money Deposits may be made by our mobile app ZOCCAM, wire transfer, personal or company check. If a personal or company checkis usedthere needs to be sufficient time before the scheduled closing for the check to be “collected” in the account. Allow two weeks between deposit and closing in most cases. For closings occurring sooner than that, please bring cashiers checks, wire the funds, or use our mobile app ZOCCAM.
- Proceeds can be wired. Please ask the closer to do so and provide a voided check or deposit slip, and sign the provided authorization to wire.
- Proceeds cannot be disbursed to third parties. Federal law requires disbursements be made only to the parties on the settlement statement.
These procedures are designed to protect the funds in the escrow accounts of all the parties.
Using ResWare To Your Advantage
Mason Title & Escrow Company uses one of the most advanced, sophisticated, title & escrow file management systems available–ResWare.
ResWare manages the entire transaction through a single interface, and puts the power in the users hands, and in the hands of the customers. We count on ResWare for:
- Workflow and Automation Management
- Vendor Management
- Document and Template Management
- Communications Management
- Title Production
Why does this matter to Realtors, Seller, Buyers, Lenders and Brokers?
- Parties to the transaction, when assigned access codes, can log into a customized Web site to view their files, download documents, enter orders online, and correspond with employees. Access continues after the closing, so documents needed later–title policies, settlement statements, surveys–can be retrieved at any time.
- Customizable workflow ensures staff consistency, reduces missing information or documentation, improves communication internally and externally, making for smoother and error free closings.
- Communication Management shares information about files across the employee base, making it possible for multiple persons to assist with files if assigned staff are not readily available.
- ResWare turns all documents and communications into electronic files, reducing paper and document misplacement, and making those documents readily accessible to all authorized parties.
- Employees communicate quickly and effectively through e-mail, faxes and the ResWare interface directly from a customer file, and all such communications are logged and preserved.
- Incoming e-mail messages and attachments are automatically locked to a customer file when a valid file number is found in the e-mail’s subject line, making ResWare the central repository for all communications.