Step 1 Starting the process
A purchase/sales contract is signed by the buyer and seller and delivered to the closing agent, usually with a deposit. The escrow is accepted by the escrow agent, usually by a signature on the contract. The escrow agent starts the closing process by opening a search of the records. The file begins to be processed. Tax information, loan payoffs, survey (if necessary), maintenance fees, inspections/reports, and hazard and other insurances as well as additional legal papers are requested.
Step 2 Title search and examination
This is a search made of the public records. Records searched include deeds, mortgages, paving assessments, liens, wills, divorce settlements, court records, home owner associations, etc. and other documents affecting title/ownership to the property/asset. Title examination/examination of the records is the investigation of the documents found during the title/ownership search that affect the title to/ownership of the property/asset. This is when verification of the legal owner is established and the debts owed against the asset are determined. Once completion of the search and examination, an allegiance report is prepared, reviewed and sent to the interested parties.
Step 3 Document preparation and/or of the records
The closing officer reviews the necessity to transfer ownership, reviews instructions from all parties to the transaction, reviews legal and loan documents, assembles charges, and prepares closing statements, addenda, and schedules the closing.
Step 4 Settlement/closing the transaction
Escrow/settlement agent oversees closing of the transaction. Seller signs the deed/transfer of ownership document and closing affidavit. Buyer signs the new note and mortgage when relevant. The old loan is paid off. Seller, real estate professionals, attorneys and other parties involved in the transaction are paid at the closing.
Step 5 Post closing
Before or after the signing has been concluded, the escrow/settlement agent will forward payment to any prior lender, and pay all parties who fulfilled services in connection with the closing (if they have not yet been paid). The transaction documents are recorded in the appropriate office in which the property is located. Title insurance policies are prepared and sent to the new lender and to the buyer when applicable. This all happens without any further actions by the buyer or seller.