Check out this helpful article curtosey of Land Title: Topic of the Month
All parties involved in a real estate transaction want to experience the smoothest closing possible. Communication is key. Some helpful tips are featured below that will assist in creating a positive experience in the closing for your Sellers and Buyers.
Providing Information to the Title Company
A great way to capture all of the information needed by your closer is to use a Closing Control Sheet. Utilize this to fill in commissions and other pertinent information needed. This will prevent numerous phone calls and emails being sent to request this information. If your office doesn’t supply one, a Land Title sales representative would be happy to provide you one with a blank form if requested.
- It is imperative that along with a fully signed contract that the closer receives e-mail addresses, physical addresses and phone numbers for the Buyers and Sellers. The new lender information is also needed so that their is immediate access to the fees for the preparation of the Good Faith Estimate for the buyers. Please note that the information you provide is not shared.
- It is extremely important that any contract amend/extends are sent to your closer as soon as possible. Any change to buyer(s) names, additional credits from seller to buyer, or any change of closing date, etc. affects your closing.
- The closer will also need information on any current loans on the property. The closer can contact your seller directly- please notify your seller that the closer will be contacting them for their loan numbers and social security number, which is required by most lenders when ordering the payoff statement. Many lenders also require a written authorization from the seller to release a payoff statement.
- If you would like the closer to order the Association documents, please notify the closer immediately so that the contract deadline can be met. Land Title staff can also order these documents for you when Land Title is not the closing agent on the transaction. Contact a Land Title sale representative or closer for the applicable fees. Please Note: Not all offices outside of the Metro area can provide this service.
- Will all the parties be able to attend the closing? Will a Power of Attorney need to be prepared or is a mail out of the closing documents required? If a buyer cannot attend the closing, the new lender must either approve the use of Power of Attorney or approve mailing out their documents for signing. Also, if the party is out of the country, they will need to arrange for the acknowledgment of their documents, which will then need to be authenticated by a document called an Apostille.
- Notify the closer if your seller has an out-of-state address and the property being sold is an investment property or second home. They could be subject to a 2% State of Colorado withholding. Also, inform the closer if the seller is a foreign individual or entity without a taxpayer ID.
- If your seller has owned their property for more than 10 years and is older than 65 years of age, check with them to see if they have applied for the Senior Tax Exemption on their property taxes with the county assessor.
Scheduling the Closing
- Because of the high volume of closings at the end of the month and on every Friday, you may have more options and have a more enjoyable closing if you choose to close mid-month or mid-week.
What to Bring to the Closing
- All buyers and sellers must bring a valid driver’s license or picture ID issued by the state, or a valid passport. If there has been a change to marital status that is not reflected on the ID, then the party must provide a marriage license or divorce decree as documentation.
- Any funds due at closing must be brought in the form of “good funds” as required by Colorado law. Good funds can be a cashier’s check or wired funds. Money orders, ACH payment systems and Western Union transfers are not considered good funds.
- Seller’s Social Security numbers or Taxpayer ID’s will be needed.
Funding the Closing
- All original documents must be received from all parties prior to disbursement of funds. This includes Powers of Attorney and any documents mailed to the parties for signature. An email copy of these documents is not sufficient for funding.
- Your closer must be in receipt of all funds due at the time of closing. In most instances, the new mortgage lender now requires the closer to email some of the signed documents for their review. They will then give the closer authorization to “fund” the closing by providing them with a funding number. Until the closer receives this number from the new lender, they are not authorized to disburse any funds in the transaction.
- If your seller pre-signs their documents prior to the buyers, inform them that any proceeds being wired to them might not be sent the next business day. The wire cut-off time for the bank Land Title utilizes is 2 pm.
- If unable to fund a transaction at the time of closing, the closer will have an “Extension of Escrow” signed by all parties. As an agent, you are also required to obtain an Amend/Extend signed by all parties.
- When your seller is an entity such as a Trust, LLC, Corporation, etc., the closing agent is required to have the proceeds payable to the entity. For example, we cannot have the proceeds payable to the “trustees”, they must be payable to the actual trust. We have found that many entities, such as a trust or an LLC, do not currently have a bank account under that name. Most likely their bank will not accept a deposit of the seller proceeds into an account held by a different name. So your sellers will need to provide their trust documents or operating agreement to the bank to open an account prior to closing. It is advisable for the seller to contact their bank for its individual requirements.
