Real Estate Closings and The Closing Process
The Closing is the final step in a Real Estate transaction - the point at which the Seller transfers ownership to the Buyer. If buying real estate was as simple as exchanging a check for keys, closings would be easy. But there are so many other issues that must be handled and addressed, including: properly signing and recording reams of documents, legally transferring title, insuring the buyer's lender and the buyer's new ownership interest, and making sure that all of the seller's mortgages and taxes were paid at closing. In Wisconsin, all of these issues are handled by a title company.
Step One: Ordering Title
Once you've received an accepted offer, it's time to "order title." This means placing the order for title insurance and closing the sale. Ordering title at Homestead Title Company is simple. Either order on-line by clicking here or email us at with the property address and seller's name. Shortly after placing your order, we will need a copy of your accepted offer to purchase and any amendments.
Step Two: Title Search and Commitment
Once you've placed the order, the title company will immediately get to work searching the public records for the property and the parties. We will identify all liens (debts that attach to the property) that must be paid or cleared before the buyer can assume ownership. The title company will then issue a title commitment which is promise or commitment to issue a title policy. It is also a report of what debts and liens must be paid or addressed at closing. The title commitment may provide warnings of any flaws in title that may be addressed prior to closing. It will also identify any "exceptions" or title issues that will not be insured and will become the buyer's responsibility. Some exceptions, like utility easements, may be acceptable.
Step Three: Preparation of the Settlement
After you receive the title commitment, we will be hard at work behind the scenes. We will be ordering loan payoffs to make sure the seller's mortgages are paid in full and released from the property. We will also be creating a settlement statement showing all costs for the buyer and seller. All parties should have a chance to review the Settlement Statement prior to closing. The buyer's lender will also prepare a "Closing Disclosure" or CD with all the same numbers. Either the title company or the buyer's lender will notify the buyer of how much money to bring to closings. Closing funds must be paid by certified or official bank check.
Step Four: The Closing
Finally, the closing date arrives. All parties should bring photo ID to the closing and, of course, the Seller should bring keys and garage door openers. At closing, each party will sign many documents. The sellers may sign a few documents. The buyers will likely sign 100-150 pages of documents (don't worry, Homestead uses 100% post consumer product recycled paper). The title company will make sure that all payments are made to any prior lenders, and that fees are paid to the title company, recorder, and buyer's lender among others. And, of course, we will issue checks, if appropriate, to Realtors and the seller. At this point, the closing is complete and the buyer owns the house.
Although the closing is complete, the title company continues to work behind the scenes. We make sure that all payoffs get to the appropriate lender or other party, that the final water bill is paid, that all documents are properly recorded, and finally, that title policies are issued.