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Real Estate Questions Answered Here
by Art Santellen, REALTOR®

Note: This is the 11th and final installment of a special series of 11 columns I'm writing to teach you everything you need to know about buying a home and getting yourself ready to buy a home. This week, I'll tell you about step #10 - The Closing. 

Stop #10 - The Closing

It's been a long and difficult process. Before I get into the closing, I'd like to share a couple of thoughts with you about what happens just before the closing. 

By this time, hopefully, all the documents and letters have been submitted to the mortgage company. A fairly thick stack of documents have accumulated and is called the "loan package". This loan package is sent by the mortgage loan officer to his or her boss for review. Then, it's shipped via overnight mail to a loan underwriter. 

The loan underwriter is the check maker's personal representative. He or she is the final authority on whether the loan should be approved or not. An underwriter reviews every document....every document. Their job is to be the last person to double check every part of the loan before the investor (the guy or company with the money) writes the check so you can buy your house. 

Once we get underwriter approval, the mortgage loan officer's loan processor prepares financial data and sends it to the loan closer. In our community, this person is most often a closer hired by the title insurance company. Their job is to make sure all the real paperwork is ready for signatures. One of these 50 or so documents is the Settlement Sheet. It shows the purchase price, loan amount, fees that need to be paid, and amounts that need to be placed in an escrow account for future disbursement (like taxes and insurance). The Realtor's job is make a final review of all the arithmetic and certify with his/her signature that everything's accurate. In my practice, I find an error in about 10% of the settlement sheets I review. 

Both buyer and seller meet at the closing office. Again, in our community this is usually the title insurance company's office. Besides the buyer and seller, the others present include both Realtors, and sometimes the mortgage loan officer. Sometimes, an attorney or two will be present. Some real estate transactions include assistance from the city, county or a non-profit organization. In those instances, representatives from each organization is also present. It's OK to bring kids but not encouraged. 

The real estate closing is really two closing rolled into one. One closing is aimed at closing the real estate contract. It requires both buyer and seller to certify that the property being purchased is clearly identified. It also includes certification that ownership of everything that was included in the deal is being passed to a new owner. You know, things like refrigerators, washers and dryers, hot tubs, and swing sets. The seller certifies that ownership of these items is being passed without any strings. The buyer certifies that the physical condition of everything is satisfactory. Sorry, cleaning the oven is usually not part of the deal. 

The second closing is the loan closing. In this closing, the buyer certifies that they still have a job and have certified funds to close the deal. In addition, the buyer signs several documents which place a lien on the property if it is to be used as collateral for the home loan. The buyer also signs what amounts to a promissory note that the mortgage company can foreclose on their home if they fail to make their monthly mortgage payments. 

After all this reading and signing, money is passed around. The buyer gives the closer a certified check for their down payment and closing costs. The seller (usually) gets a certified check for the equity in their property less their closing costs. The Realtors get a check for professional services rendered. Once in a while other checks will be prepared by the title company closer to pay other people. Attorney's fees, buyer creditors, seller creditors, and other folks, for example. 

The buyer then gets the keys to their new home. From that moment, the buyer is the new owner of the house and they can move-in! 

Whew! That was a lot of work! No wonder Realtors get such big pay checks....we earn every dollar. 

Next week: agencies that can help you buy your first home. The following week: documented evidence why people are going crazy over the price of homes in Colorado Springs.


NOTE: As you can see, I really do get questions from the public. To add your question to this list, please send them to me at the address listed below. Thanks.

The answers to these, and other fascinating real estate questions will be answered here, in Hispania News, next week.

When you're ready to buy or sell a home, see a REALTOR®

Art is a REALTOR® with Heritage Realtors in Colorado Springs.

If you have a real estate question you’d like answered, please send them to:

Art Santellen, care of Hispania News
PO Box 15116
Colorado Springs, CO 80935
 

 
 
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