A Typical Close of Escrow
A number of things happen during the close of escrow, here is a little guide for the first time (or more likely "rusty" borrower).
1) During a purchase, The Purchase Agreement may provide the buyer with an opportunity to walk the property (Final Verification of Condition) where a last inspection of the buildings (sometimes for pre-closing agreed upon repairs) is completed. The timing on this is typically within the five days prior to COE.
2) The Lender will send Loan Documents to the Title Company. The Escrow Officer there will prepare these and other documents for your signature.
3) On commercial transactions, borrowers can either meet the broker's at a specific location, or an escrow will send a traveling notary to a location of the borrower's choosing to sign closing papers. In most cases, an escrow officer will accompany the notary to guide the borrower through the Loan Documents, explaining the purpose of each document. (A list of Loan Documents including various ways title can be vested are included here). In most cases a borrower will receive a draft Settlement Statement for review prior to closing, to make adjustments. At the signing a final "Settlement Statement" which itemizes the various Closing Costs (Title Company fees, Bank charges, Broker Fees, etc.), and the credits (your deposit, your loan, etc.) will be part of the loan documents needed to be signed. The second is the "Note," which shows the interest rate and other terms of your loan. The other loan documents are usually boilerplate, via the lender you are working with. In some cases an attorney can review these documents, but most lenders do not allow for a change in these documents thus making them non-negotiable. It is important that you bring a photo ID as some of the documents will need to be notarized. The Lender also requires that you sign your name exactly as it is typed below the signature line. No funds are required at signing. If there is a "gap" in the purchase price vs. loan amount + closing costs shown on the Settlement Statement, requiring the borrower to bring in cash to close (Good Funds), it will be collected in the following days by Title.
4) After loan documents have been signed, the Escrow Officer will prepare the paperwork and send it back to the Lender. The Loan Documents are then reviewed by the Lender (which can take up to three days). When the lender has approved the loan documents, they notify the Title Company that they are ready to fund (wire your loan proceeds to the Title Company). Lender Funding occurs the business day prior to close of escrow. Title will request that any cash required by the borrower to be sent to Escrow on or before this day. Note, as a borrower you are responsible for interest payments starting the day Lender funds are transferred to Escrow.
5) On the day of Close of Escrow, the Title Company will send a representative to the County Recorder's Office to record a Deed showing the transfer of title (either to a new owner in a purchase) and/or recording the Deed of Trust for the new loan. Each recording generates a "series number" from the County Recorder's Office. After having all the day's deeds recorded, the Title Company's representative faxes the list of series numbers to the Title Company, confirming the recordings. Once the Deed has been recorded, the transfer has been completed. In a purchase, the transfer of all utilities, bills, etc. is usually completed at this time as well per the provisions of the Purchase Agreement.
Day 1: Loan Documents arrive at the Title Company. You sign and the Documents are sent back to the Lender via an overnight delivery service.
Day 2: The Lender receives the Documents and begins the review process.
Day 3: The review process concludes and the Lender notifies the Title Company that they will be wiring the loan funds the following day.
Day 4: The Lender wires the loan funds to the Title Company.
Day 5: The change of title is recorded with the County Recorder. Escrow is closed.
For more information visit http://csfinancial-commercial.com.
1) During a purchase, The Purchase Agreement may provide the buyer with an opportunity to walk the property (Final Verification of Condition) where a last inspection of the buildings (sometimes for pre-closing agreed upon repairs) is completed. The timing on this is typically within the five days prior to COE.
2) The Lender will send Loan Documents to the Title Company. The Escrow Officer there will prepare these and other documents for your signature.
3) On commercial transactions, borrowers can either meet the broker's at a specific location, or an escrow will send a traveling notary to a location of the borrower's choosing to sign closing papers. In most cases, an escrow officer will accompany the notary to guide the borrower through the Loan Documents, explaining the purpose of each document. (A list of Loan Documents including various ways title can be vested are included here). In most cases a borrower will receive a draft Settlement Statement for review prior to closing, to make adjustments. At the signing a final "Settlement Statement" which itemizes the various Closing Costs (Title Company fees, Bank charges, Broker Fees, etc.), and the credits (your deposit, your loan, etc.) will be part of the loan documents needed to be signed. The second is the "Note," which shows the interest rate and other terms of your loan. The other loan documents are usually boilerplate, via the lender you are working with. In some cases an attorney can review these documents, but most lenders do not allow for a change in these documents thus making them non-negotiable. It is important that you bring a photo ID as some of the documents will need to be notarized. The Lender also requires that you sign your name exactly as it is typed below the signature line. No funds are required at signing. If there is a "gap" in the purchase price vs. loan amount + closing costs shown on the Settlement Statement, requiring the borrower to bring in cash to close (Good Funds), it will be collected in the following days by Title.
4) After loan documents have been signed, the Escrow Officer will prepare the paperwork and send it back to the Lender. The Loan Documents are then reviewed by the Lender (which can take up to three days). When the lender has approved the loan documents, they notify the Title Company that they are ready to fund (wire your loan proceeds to the Title Company). Lender Funding occurs the business day prior to close of escrow. Title will request that any cash required by the borrower to be sent to Escrow on or before this day. Note, as a borrower you are responsible for interest payments starting the day Lender funds are transferred to Escrow.
5) On the day of Close of Escrow, the Title Company will send a representative to the County Recorder's Office to record a Deed showing the transfer of title (either to a new owner in a purchase) and/or recording the Deed of Trust for the new loan. Each recording generates a "series number" from the County Recorder's Office. After having all the day's deeds recorded, the Title Company's representative faxes the list of series numbers to the Title Company, confirming the recordings. Once the Deed has been recorded, the transfer has been completed. In a purchase, the transfer of all utilities, bills, etc. is usually completed at this time as well per the provisions of the Purchase Agreement.
Day 1: Loan Documents arrive at the Title Company. You sign and the Documents are sent back to the Lender via an overnight delivery service.
Day 2: The Lender receives the Documents and begins the review process.
Day 3: The review process concludes and the Lender notifies the Title Company that they will be wiring the loan funds the following day.
Day 4: The Lender wires the loan funds to the Title Company.
Day 5: The change of title is recorded with the County Recorder. Escrow is closed.
For more information visit http://csfinancial-commercial.com.
Source...