[NOTE: John Pitrelli continues his series for home buyers and home sellers in Northern Virginia with this brief explanation to help “demystify” the process of settlement and “closing” on your home purchase or sale. To view John’s other posts please click here.]
Once the closing documents have been signed and notarized, the post-closing process can begin. The first step in post-closing is to verify that all funds have been received in “liquid” form (cash, wire or certified funds).
Assuming we have received the funds, we print checks to all parties that are to be paid in accordance with the HUD-1 settlement statement. We also print a balance sheet to confirm that the funds received equal the funds to be disbursed. Before we can disburse any funds we have to record the Deed and Deed of Trust in the county or city where the property is located. As part of the recording process, the title examiner will do a final title update (commonly referred to as a “bring down”) to be certain that the Seller still has clear title and no new liens have been recorded since the previous title search.
The statute governing closings (settlements) in Virginia, known as the “Wet Settlement Act”, requires that the closing agent record and disburse funds within 72 hours.
Payoffs to the Seller’s existing lenders are sent by overnight delivery service with a certificate of satisfaction for the paid off lender to return to us, so that we can record a release of the loan. We also include an instruction to the lender to refund any payoff overage and/or escrow refund directly to the Seller at the Seller’s new address. Loans that have been paid, but not released, are a fertile area for title defects. I will devote an entire future post to the issue and to our system designed to avoid the problem.
Seller’s funds are usually sent by wire to an account Seller designates at the closing. To this end we advise the Seller to bring a voided check or wiring instructions with them to the closing.
The Buyer’s lender is provided a complete closing package including its original loan documents and copy of the Deed of Trust. Real Estate commissions, Home Owner Association payments, Home Warranty information and payment and payment to various service providers are also sent out with a copy of the final HUD-1. After all documents have been recorded and all funds disbursed we scan the completed file to digitally store all pertinent documents and information.
The final step in post-closing usually happens several months after the closing, when we send out the original recorded Deed and the final owner’s title insurance policy to the Buyer.
[This post by John Pitrelli. You can contact John at j.pitrelli@keytitleva.com]