Striking a deal to buy or sell real property sets other processes in motion. Whether you are the buyer or the seller, you may be involved with lenders, closing agents, real estate agents, attorneys, inspectors, and so on. At the end of the process, however, you will have a closing. If you’ve never attended one, you may wonder what really happens at a real estate closing?
Once an offer to buy a property is accepted, the parties usually sign a contract stating their intention to go through with the deal. Pre-closing activity begins at that time and may take several weeks.
Minnesota is a “wet funding” state. This means that all the paperwork is finalized at closing and money is disbursed immediately or within a few days. So, all paperwork, title searches, and so on will be completed by the closing date.
People who may be involved in the transaction include:
- A closing agent, who may be a real estate attorney or a title company representative.
- A representative from a title company, if not acting as closing agent. Virtus Law provides title insurance coupled with legal representation for a smoother closing experience.
- Inspectors who will make a general inspection of the property, and check for lead-paint, mold, pest, and radon issues.
- A lender.
- Appraisers may be hired by the lender or broker.
- An escrow agent, attorney, or broker will accept earnest money.
The actual closing process varies depending on the type of real estate transaction being conducted. However, what follows is a basic timeline for a typical real estate closing.
Activity Between Offer and Closing
After the contract has been signed, a lawyer or title company will conduct a title search to make sure there are no problems with the property’s title. A written disclosure about the property, including problems or environmental hazards, will be reviewed and signed by the buyer. Seller provides a seller’s property disclosure statement that is signed by both buyer and seller. Inspections and appraisals commence and funding for the purchase is finalized.
The closing agent typically sets a date for the closing and gathers all the documents to be reviewed and signed at the closing. In addition, the buyer will be told how much money will be due at the closing.
The parties and closing agent review all the documents prepared for the closing. Changes are made, if necessary, then everyone signs. Typically, the buyer signs more paperwork than the seller.
Federal and state law require that a Closing Disclosure that lists all closing costs be prepared and presented at the closing. The Closing Disclosure, also known as a Settlement Statement, lists the fees each party owes.
After the closing, the lender will send money tendered by the buyer to the closing agent’s escrow account. This money will be disbursed to the right parties.
Talk to a Lawyer About Your Real Estate Transactions.
At Virtus Law, the attorneys provide advice based on years of real life experience. To set up an appointment, call us at 612.888.1000 or send us an email at email@example.com. Serving clients in Minneapolis, Edina, Mendota Heights, Red Wing, and surrounding communities.