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Preparing for Closing as a Seller
What Is a “Closing”?
A closing is the process by which title to the property is transferred from the seller to the purchaser and the buyer’s loan is finalized. This occurs once the loan is approved, title work is complete, and no problems prevent completion of the transaction.
A closing in Georgia consists of all the parties to the transaction meeting to execute necessary documentation under the direction of an attorney chosen by the lender. The closing attorney represents the lender where a loan is involved and either the seller or purchaser in the instance of a cash closing.
Who Attends the Closing?
The closing is attended by purchasers, sellers, real estate agents, and usually loan officers. Anyone who holds title to a property that is being sold must attend the closing. If you are not on title, but your spouse is you are not required to attend the closing though you certainly may if you wish.
What if You Can’t Attend the Closing and You are on Title?
If you are unable to attend your closing, please call our office as soon as possible so that we may prepare a Power of Attorney for your closing. In such an instance, you will execute a Specific Power of Attorney form appointing another party as having power to execute documents on your behalf. However, not any Power of Attorney form will do: the document must be specific to real estate and refer to the property you are selling in particular. While those forms at Office Depot may seem convenient and helpful, it is unlikely that they comply with the Illinois real estate Power of Attorney requirements, and will therefore be invalid. Hence, it is probably best if our firm prepares this document for you. Please contact our office as soon as you realize that you will be unable to attend the closing so that we may prepare this document for you. You should know that there will be a nominal fee for the preparation and recording of this deed. There is no charge to have this document executed in our office prior to the closing. The execution involves the signing by the party who will not attend. A witness and notary is present to witness your signature. If the party who will not be able to attend the closing is unable to come to our office prior to the closing to execute this document, our Title Insurance Company requires that we locate a Title Company or Attorney where the signing party may go to have this document executed. In this case, there is a courier fee to have the original document sent to our office prior to closing as well as a fee which may be charged by the Attorney or Title Company who provides the witness/Notary service.
Information Required from You Prior to Closing
In order to prepare your file for your closing, our office will require several items of information from you about the sale of the home.
The Sales Contract You will need to be sure that our office has received the most up-to-date version of your sales contract. This includes any amendments that affect the sales price of the home or specify any repair items that should be paid by the seller.
Mortgage Payoff Information It is vital that our office obtain information relating to the loans that you will be paying off at closing. Part of closing is the conveyance of clear title from you, the Seller, to the Purchaser. This requires that all debts owed by you secured by the property must be paid-this would include all first mortgages, second mortgages and any equity lines of credit. As the closing attorney, it is our responsibility to obtain a payoff statement from your mortgage company, but we will be unable to do so without your information. We will need the following from you immediately:
- The name of your lender(s);
- The lender’s customer service phone number; and
- Your loan number for each loan you have secured by the property you are selling.
Your Forwarding Address We will need the address of the new home you are moving to. Our firm requires this information for several reasons. First, as the settlement agent, we are required to file tax information regarding the sale of your home to the Federal government. Secondly, because we will be handling the payoffs of your debts, including your home mortgages, it is often necessary that we provide these companies with a means to reach you. They may need to contact you regarding refunds of escrow deposits or an overpay, and we simply need a way to direct them. Third, we may need to contact you regarding a post-closing matter.
Your Social Security Number As stated before, our firm is required to file information regarding the closings we handle, and the parties involved. Therefore, we need this information.
Homeowners’ Association/ Condo Association Information If your home is located in a subdivision that is subject to a mandatory homeowners’ association or condo association, it is necessary that we have information to contact the treasurer’s office or billing department of the association. The reason for this is that we must ensure that all debts relating to the association are paid, and that we make the proper pro-rata credit to you for the dues that you have already paid.
An Owners’ Title Policy If you purchased an Owners’ Title Policy at the time you bought your home, you should be sure to provide a copy of it to your real estate agent if you have one and also to our office. This will assist our title examiners in their work, as well as assist our pre-closing staff as they work to ensure clear title is conveyed by you to your purchasers.
Determining What your Proceeds Will Be at Closing
In calculating what your proceeds will be at closing, you should know that you will be required to deduct a number of items from the sales price you are receiving. These items will be the brokers’ commissions, your mortgage(s) payoff amount, any repair bills to be paid at closing, any taxes you may owe, the transfer tax fee imposed by the state, and any seller paid closing costs.
What You Should Bring to Closing
The following is a simple checklist of items you should bring to closing:
Yourself and Whomever else Holds Title to The Property Being Sold That’s right. All of you must attend, unless, of course, a Power of Attorney is involved. In that case, the original Power of Attorney document must make it to closing along with a copy of the absent party’s photo ID.
A valid Photo ID (A Drivers’ License, Passport or Military ID will work): Each borrower must provide a valid ID at closing. It may seem strange, but the title companies require us to obtain a copy of your ID just to make sure no imposters are executing documents in your name.
Certified Funds It is possible that you will be required to bring funds to closing. Funds should be either in the form of a Cashier’s Check or Wired Funds from your bank. We will be able to provide you with the exact amount you should bring as soon as we obtain your payoff statements from your mortgage company, determine the commission you are paying, and have received the invoices for the bills to be paid out of your proceeds at closing. This is will usually occur somewhere between 72 and 24 hours before the closing. If you bring an amount to closing that is over the amount required, we will provide you with a check for the difference. If the amount you bring is less than the amount required, you may supplement it with a personal check. It is our firm’s policy not to accept a personal check for an amount greater than $1000. Please make your Cashier’s Check out to yourself, and you can endorse it to us at closing. If you wish to wire your funds, please contact our office so that we may fax wiring instructions to your bank. Please note that there will be a nominal wiring fee for wires received by our office.