Closing And Title Services

WHAT IS A REAL ESTATE CLOSING?

Closing is the term used for the process of executing legally binding documents in a transaction that involves property. This transaction includes the transfer of title or the collection and disbursement of funds in connection therewith.

This is the last step in a real estate transaction where the parties consummate the purchase contract on the closing date. Following the end of that process, the ownership of the property is transferred to the buyer.

What is a Settlement Statement?

A Closing Estimate Form (sometimes called a HUD-1 Settlement Statement) is a government-regulated form provided by the title company (closing agent) that itemizes all fees and charges for the buyer and seller and gives full disclosure of all monies involved in a real estate transaction.

Some of these fees and charges might include:

Contract purchase price
Agent commissions
Lender fees for the loan
Insurance
Title company charges
Abstract of title
Property taxes
Surveys
Recordation fees

The settlement statement outlines your debits and credits and provides each party with a “bottom line” figure. For a more detailed description of the HUD-1 Settlement Statement, see this link.

When and how much money I need to bring?

Because we rely on third parties such as lenders to provide us with instructions, information, and figures for your settlement, we often cannot furnish to you the exact amount you need to bring to closing until the day before, or, sometimes, even the day of settlement.

However, you should be able to rely on your lenders or your realtor’s good faith estimate for the approximate amount of money you need to bring with you. If you happen to bring too much money to settlement, we refund back to you any excess amount upon completion of the closing.

Obtaining your insurance early will assist the lender in determining escrows which can speed up the ability to provide an accurate settlement figure.

WHO ATTENDS THE CLOSING?

At a purchase settlement, typically the sellers, purchasers, and their real estate professionals will attend the closing, which will be conducted by one of our competent and experienced attorneys or settlement officers. At a refinance settlement, usually, only the borrowers and our attorney or settlement officer are present.

In certain circumstances, if you cannot attend the closing, a power-of-attorney can be prepared for you. A power-of-attorney is a legal instrument that allows another person to sign legal documents on your behalf. Please give us a call to discuss this if you will not be able to attend.

While simple real estate transactions may be handled without a lawyer, you may want your own attorney to clarify any terms that are unclear to you in any documents you are being asked to sign. You may also need sophisticated tax or real estate advice for more complex real estate transactions.

What is a Homestead Exemption? How do I get it?

A properly filed homestead exemption reduces the amount of money homeowners must pay for their annual property taxes. The Louisiana Homestead Exemption of each parish varies, but filing for one can save hundreds of dollars in taxes annually.

Property owners are allowed only one homestead exemption – for their primary residence. Homestead exemptions on an investment property are not allowed.

To file for the homestead exemption, bring a copy of the recorded act of sale where you acquired your home to your local parish tax assessor’s office. Filing for the exemption is done in person the first time. Either you or your spouse can do it – it is not necessary for both of you to be there. Each year thereafter, a postcard is mailed to your home for renewal.

HOW DOES THE CLOSING PROCESS LOOK LIKE?

Starting the process

An escrow or sales contract (agreement to close) starts the process by opening a title order that is then processed. Relevant tax information, loan payoffs, surveys, homeowner/maintenance fees, inspections/reports, and hazard and other insurances, as well as legal papers, are ordered and title commitments/preliminary reports are reviewed and sent out.

Title search and examination

Public records, such as deeds, mortgages, paving assessments, liens, wills, divorce settlements, and other documents affecting title to the property, are searched. Title examination is the examination of the documents found during the title search that affect the title to the property. This is when verification of the legal owner is made and the debts owed against the property are determined.

Document preparation and/or lender request for title

Review lender instructions/requirements, review instructions from other parties to transaction, review legal and loan documents, assemble charges and prepare closing statements, and set closing.

Settlement. Closing the transaction

The escrow/settlement officer oversees the closing of transaction. Seller signs the deed, then the buyer signs a new mortgage. The old loan is paid off and a new mortgage is signed. Seller, real estate professionals, attorneys, and other parties to the transaction are paid. Documents are recorded in the county in which the property is located.

Post-closing

After the signing has been completed, the title agent will forward payment to any prior lender, pay all parties who performed services in connection with your closing, and payout any net funds to the seller before recording the documents with the county. This all happens without any needed involvement from the buyer or the seller.

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Louisiana real estate Purchase Agreement FREE download!

What you need to bring to the closing

Buyers

Government-issued photo identification such as a driver’s license, passport, or military I.D
Certified funds for the balance due
Proof of homeowner’s insurance
All persons who are required for ownership/mortgage

Sellers

Government issued photo identification
Keys/garage door opener
Security codes for alarm
The lender may also require a current wood-destroying insect or termite report
All persons who are required to transfer ownership

Agents

Deposit check
Commission statement from the broker
Home warranty, if applicable
Termite certificate, if applicable
Key statement
Any other broker required documents

What you will leave with after the closing

Buyers

New home.
Keys.
Copies of the settlement statement, cash sale, note, mortgage, initial payment letter, and other important lender documents.
Home warranty, if applicable.

Sellers

Proceeds from the sale.
Copies of the settlement statement and cash sale.

Agents

Commission check.

Certified funds can come in the form of a cashier’s check, teller’s check, money order, or certified personal check. We do not accept cash. Please call our office in advance if you intend to bring cash to the settlement. You may also be required to bring additional documents which our office will inform you of in advance.

Remember that when you are buying or selling a property, you are changing the legal owner of the property. That’s the essence of a title transfer.

While the time of a settlement can vary greatly, typically a refinance will take about 30 minutes and a purchase will take about 45 minutes.