Whether you’re a first-time homebuyer or an experienced property owner, understanding what happens after closing can help you avoid surprises and ensure a smooth transition into homeownership.

Post-closing procedures finalize the legal aspects of your real estate purchase, ensuring everything is properly recorded and your responsibilities are in order. Let’s take a closer look at the key steps.

1. Disbursement of Funds

After the closing, the settlement agent or attorney conducting the settlement distributes the funds to the appropriate parties. This includes:

• Paying off the seller’s mortgage
• Covering any real estate agent fees
• Disbursing funds for the buyer’s expenses, such as closing costs and taxes

The buyer’s lender is also notified that the transaction is complete and the mortgage funds will be disbursed to the seller’s bank account.

This typically occurs within 24 to 48 hours of closing, ensuring that all parties receive their due payments. Buyers should confirm with their lender when the first mortgage payment is due.

2. Recording the Deed and Mortgage

Once funds are disbursed, the title company or settlement attorney records the deed with the appropriate local government office (usually the county or city Clerk’s office). This officially transfers the title (ownership) from the seller to the buyer.

At the same time, the lender’s mortgage is recorded in the public records. This step establishes the property as collateral for the loan and secures the lender’s interest. The mortgage document includes key details such as the loan terms, interest rate, and repayment schedule.

The deed must be recorded within a certain period, usually a few days after the closing, to ensure that the new owner’s title is legally recognized. Once the deed and mortgage are recorded, the buyer should receive copies for their records.

3. Title Transfer and Title Insurance

After the deed is recorded, the title company or settlement agent finalizes the title transfer and issues title insurance policies to the buyer and lender:

• Owner’s title insurance is not required but is highly recommended. It protects the buyer from potential title disputes, unknown liens, or legal claims that could arise after closing.
• Lender’s title insurance is generally required by mortgage lenders. This policy protects the lender’s interest in the property until the mortgage is fully paid off.

4. The Buyer Takes Possession

While legal ownership is transferred at closing, possession of the property doesn’t always happen immediately. In Virginia, buyers typically take possession as soon as the closing is complete unless the contract specifies otherwise.

In some cases, the seller may remain in the home temporarily, such as under a rent-back agreement. However, if no such agreement exists, the buyer has the right to take possession immediately.

5. Utility Transfers

It’s important for the buyer to transfer utilities into their name promptly. This includes essential services like electricity, water, gas, and sewer. While instructions are often provided at closing, it’s the buyer’s responsibility to ensure the services are activated by move-in day.

6. Post-Closing Documentation

In the weeks following closing, buyers should watch for important documents in the mail, including:

• The official recorded deed and mortgage documents (typically received within a few weeks)
• An annual mortgage interest statement from the lender (which may be helpful for tax purposes)

Navigating post-closing steps can be complex, and ensuring everything is properly recorded is essential. If you have questions about post-closing procedures in Virginia or need assistance throughout the process, contact Linear Title & Escrow.