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Reynaldo, Other/Just Looking in Texas

How does it work all the process at closing?

Asked by Reynaldo, Texas Mon Aug 13, 2007

I would love to know a little bit about the process at closing, who pays at closing the buyer or the seller and why?

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Great Quesion Reynaldo...... Here goes....

Assuming you are talking about an Escrow closing. ( Not all state utilize escrow companies ) I can't speak for non-escrow states, since I never worked there.

The purpose of the escrow company is several fold.

!. To review the title to be sure there are no clouds, liens, or other impediments to giving clear title to the property.. If something does come up, it will have to be cleared up before escrow can close and title can be transferred to the buyer.

2. Hold all the money, such as earnest money, cash down payment portion, proceeds from loans...... as a neutral third party.

3. Arrange for all the documents to be signed, recorded and returned to the proper parties.

4. After recording the transaction with the proper government body, usually the county, .....Pay the bills as directed by the buyer and seller.
The bills submitted by providers could be, for example, termite inspection and treatment, repair work needed and agreed to, costs of obtaining a loan....as agreed to by buyer and seller. ( Buyer could pay some of these costs and seller could pay some....as documented in the agreement for sale of the property, i.e points, loan costs, doc prep fees ) appraisal fee, realtor fee, title insurance fee, title work fee

5. Issue a title policy that guarantees a good clear title in the name of the buyer.;

The title company will prepare a balance sheet for the transaction with a column for the buyer and a column for the seller. Payments for the buyer and for the seller are shown in the propery column and the total must balance...this shows who ( buyer or seller ) paid how much and for which fees and services.

People sometimes get confused about the terms "earnest money" and "downpayment"

Earnest money is an agreed to amount of money paid by buyer into escrow that says, "Hey, I'm serious"
Down payment is the difference between the agreed upon contract price and the loan amount which the loan company will...... well, loan on the property.....usually less than the selling price and less than the appraised value of the property. Earnest money typically is applied toward the downpayment.

The title company route is a good way to go. Normally it is quick, clean, and very reliable.
0 votes Thank Flag Link Mon Aug 13, 2007
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