THE CLOSING: WHAT HAPPENS BETWEEN CONTRACT & CLOSING

It’s during this period that the Title Company gathers all of the information necessary for the closing, processes that information, communicates with all of those involved, and prepares the necessary documents for the closing.  Here’s an idea of how it works, from the time the contract is submitted to the Title Company:

            1. Title Search Ordered.  The search will normally take about one week to complete.

2. Order Payoff Statement.  This can sometimes be a problem with a quick closing.  Most lenders require between 48 and 72 hours to issue a payoff statement.  For FAXed statements, there is an additional charge added to the payoff amount.

            3. Review Title Search and Prepare Commitment.  When the search is done, we review it to see if there is anything – like a problem, a judgment, etc. – that needs to be taken care of.  Then the commitment is prepared, FAXed to the lender and the Agents.  Lenders will not issue the loan package until they have seen a copy of the commitment.

            4. Order Support Information.  This includes the survey, termite inspection, and insurance information.  If it is a Condo or PUD, we also contact the management company for fee information.

            5. Obtain Closing Documents From Lender.  This includes all of the loan closing costs and fees.  Remember that the Title Company cannot prepare a settlement sheet until the figures have been released from the lender.

            6. Prepare Closing Documents.  This includes the Settlement Statement, and all documents necessary for the closing but not generated by the lender.  Most lenders will prepare their own documents, including the note, the mortgage, etc., but with some lenders, we are responsible for filling out the documents either in whole or in part.  In any event, we must always review the loan documents, for the lender will hold us responsible for their proper execution.

            7. Order Title Update.  Just prior to the closing, we will get our title examiner to do an update on the title search to make certain that no encumbrances have been recorded against the property since the original search was completed.

 When should I order the title work?  If the deal doesn’t close for a couple of months shouldn’t I hold off on ordering the title work?

 It is much better to go ahead and turn in the contract to the Title Company as soon as the contract is signed.  That way, if there is a title problem, then we have time to correct it. If the title work was not done until two weeks before the closing and a problem appeared, the closing might be delayed or even cancelled because there was not adequate time to find a solution.