If you are a first time buyer you will hear terms that you may not know the meaning of….Do you know what the “Closing” is? It is sometimes called the “Act of Sale” or “Settlement” and it is the legal transfer of property from the seller to a buyer. It is when the buyer and seller sign the necessary documents and if there is a mortgage the bank sends the money or “funds” the loan. Usually possession of the property is transferred but not always because at times a seller will negotiate staying in the house for a while after closing paying rent to the new owner.
So, who attends the closing? The buyer, the seller, the real estate agents representing the buyer and the seller, if an attorney state the attorney’s for the buyer and the seller, the closing attorney who usually acts as the escrow agent and the title insurance representative.
Closings are usually held at a title company office or at a bank. In Louisiana the buyer decides which title company to use and the closing is held at their office. The title company’s job is to confirm who the legal owner (s) of the property are, reveal any mortgages, judgements or unpaid taxes and identify any legal issues that might interfere with delivering the property to the buyer with a clear title. Problems need to be cleared before this transfer can take place..
The closing agent will advise you with your mortgage broker what you need to bring to the closing table. They will advise you as to the amount of any check (s) you need to bring, proof of insurance and other items.
At the closing table be prepared to sign a lot of documents which will be explained to you by the closing agent..Some of the items you will review and be asked to sign are:
1. Closing Statement (HUD-1) which details the transaction, pro rations of taxes, down payment costs, commissions and explains the bottom line;
2. Truth in Lending Statement which is the summary of your loan;
3. Mortgage Note which is your legal obligation to repay your lender;
4. Deed of Trust which gives your lender the right to come after you if you don’t pay them;
After all is signed you get the keys to your new home. You will also receive a pile of documents which you need to keep in a safe place. Some of the payments are tax deductible so talk to your accountant…
Each state is different..some states the buyer and seller do not attend the closing at the same time, sometimes the buyer or the seller are not available for the closing and will sign a power of attorney and have someone else sign for them….sometimes there are attorney’s…if you have bought property in another state don’t assume things are the same if you are moving to Louisiana, they are not.
ABR stands for Accredited Buyer’s Representative and an ABR is a Real Estate agent who can guide you through this process and get you to the closing table..I am an ABR and have experience with first time buyers. If you are a first time buyer and need some guidance, have a load of questions, don’t know where to start please contact me at 504-908-2268 and I will be glad to help.