Whether you’re a first-time homebuyer or looking to purchase a new home, it’s important to know the workings of the real estate closing process. The highly regulated title and escrow industry may have changed since your last closing experience. And if you’re new to the home buying process, settlement procedures can be confusing. Here are five key facts every homebuyer should know about the closing process.

1. Lender’s and Owner’s Title Insurance are different types of policies. Nearly all lenders require homebuyers to purchase a Lender’s Title Insurance Policy. An Owner’s Title Insurance Policy, while not mandatory, is highly recommended. An Owner’s Policy protects your financial and real estate interests as the new homeowner, in the event title troubles arise after closing.

2. Careful review of the Closing Disclosure (CD) Form is highly important. Your lender will remit to you a Closing Disclosure Form at least three business days prior to your closing date. This document provides detailed information regarding your loan, payment requirements and closing fees. Careful review of this document upon receipt is imperative. Any discrepancies you detect or concerns you have should be resolved prior to sitting at the closing table.

3. Proper identification is required at closing. Be sure to bring a current driver’s license or passport to your closing. If a representative is attending the closing and signing on your behalf by Power of Attorney (POA), the original POA document will be required.

4. Closing funds must be submitted in certified form or wire transfer (if funds are needed for closing). Personal checks (unless under $500) and cash typically are not accepted. Wired funds must be received no later than the day of closing.

5. As the homebuyer, you have the option of whether to request a boundary survey prior to closing. A boundary survey is a formal document outlaying the exact location and position of your property lines, and any easements that may exist in relation to the property. It serves to mitigate any future disputes over your property in the event another party attempts to claim a portion of your property as their own.

Educating yourself on current settlement proceedings and doing your due diligence when it comes closing on your new home is key to facilitating a smooth closing process. Remaining well-aware of the proceedings also helps ensure there are no unwelcomed “surprises” on the day of closing.

Have questions about the closing process? Contact the Linear Title & Escrow team today!

A “closing date” in real estate transactions is established by the lender. But as many well know, that magical date is subject to change dependent on a range of issues. Closing dates are scheduled for around 45 days following loan approval (on average) and most do, in fact, close on such anticipated day and time. However, often there are barriers along the way that cause delays in the scheduled time to close. Here are a few of those most common:

• Title Defects: Title problems can impede the proper transfer of property ownership from the seller to the buyer, and must be resolved prior to closing. While some title defects involve simple refiling of corrected or accurate documents, others require more time (sometimes even time in court) to sort out discrepancies in the chain of title.

• Home Appraisal Issues: When a home appraisal comes in lower than expected, the loan typically will not fund for the contract price. Underappraisals certainly can delay the closing date, and may even lead to cancellation of the contract.

• Home Repairs: Repairs identified during the home inspection must be resolved prior to closing, unless the buyer and seller come to some other arrangement. The type of repair, agreement and willingness of the homeowner to expedite this activity all impact the rate at which home repair issues stall the closing process.

• Lender Delays: Lenders may ask for additional income-, asset- or debt-related documents to ensure the buyer is financially able to pay the mortgage on the home. Timely submission of any requested information can help minimize delays of this type.

• Incongruities on CD Form: The Closing Disclosure (CD) Form is the document outlaying details of the loan, closing fees, payoff amounts, and other financial information relevant to the buyer and seller sides of the transaction. The lender must submit this document to both parties at least three business days prior to closing. Any discrepancies in the figures contained in this form must be resolved before going to closing, and will defer the closing date until this occurs.

Learn more about barriers to closing from our knowledgeable team! Contact Linear Title & Escrow today.