Even though “closing” or “settlement” is commonly thought of as the actual day that the transaction is finalized, it’s actually a process that begins as soon as a purchase contract is signed. It comprises the following:
PRE-CLOSING Inspection — This protects you against any structural or other major flaws. Hire a professional inspector to walk you through the property and detect any issues. Be sure to obtain a written summary of the inspector’s findings.
Appraisal — Your lender will require an appraisal of the property’s fair market value to ensure they’re not lending you more than the house is actually worth. Your real estate agent can help you find a licensed appraiser. In most cases, however, most lenders have their own appraiser and will take care of scheduling this directly with the realtor or homeowner.
Title Insurance — Title insurance protect you against any unforeseen claims against the property that may arise. Don’t delay, get title insurance as soon as you enter into a contract to buy. (Get a Rate Quote by entering your zip code in the quick tool in the sidebar.)
Homeowner’s Insurance — Because your new home will be used as collateral against your loan, your lender requires that you to take out homeowner’s insurance. Be sure to do this well in advance of the closing date. You will likely be required to show proof of purchase, called a “binder,” as a condition of sale. Your insurance company provides the binder.
Walk-Through – Within 24 hours before your closing date, conduct a walk-through of the property to ensure that it’s in good condition and that any issues and/or contingencies (usually raised by the inspection) are resolved.
What Your Title Company (that would be us, Shenandoah Settlement Services) is Doing as Part of the Closing Process
Our job is to coordinate many behind-the-scenes activities and gain the cooperation among all interested parties to ensure a smooth and mutually satisfying transaction.
During the closing process, we’re conducting a search on the property’s title. We pore through property records looking for potential problems that might prevent a smooth transfer of ownership. Such issues include old liens, tax liability, and housing code violations.
We may also physically inspect the property to verify the lot size and check for unrecorded easements. Once our work is complete, we offer title insurance to the lender to protect the bank from any undiscovered issues surrounding the title. Because the lender’s policy protects only the lender, you’ll want to be sure you’re covered by a title insurance policy of your own.
In addition, we ensure the purchase contract is complete and accurate. If you’ve paid a deposit or “earnest money,” the agent places the funds into an escrow account. The agent also coordinates the payoff of an existing mortgage, making sure the payoff figure is available for the final closing.
If there are any problems with the property, we bring them to the attention of all parties involved for resolution.