Here’s a brief real-life scenario of what a closing agent does:
So you’re looking for your dream home and you think you’re just about ready to dive in completely.
You know what location you like, your lender is good on the transaction, you’ve even heard back from the seller, but what about the other technical details?
Who’s going to help get you the dream house you deserve and finish off the closing process?
Let’s find out more about closing agents and why you need them!
Closing Agent: Title Company or Title Insurance
Remember: the closing agent works either under a title company, an escrow company or is a real estate agent.
This is important to know and if you take anything away from this, let it be that statement. The closing agent brings together all other parties involved in buying the real estate.
Agents from the title companies may not be there every step of the way but having one on your side from the very beginning makes your life easier during the whole process.
The closing agent also performs the following:
- Ensures all parts of the property turn over from the seller to buyer runs smoothly.
- Simplifies the whole transaction by working behind the scenes.
- Searches for the title, determine pro-rata expenses like property taxes, work with the seller’s lender, your new lender.
- Clears up closings costs, and follows up on any special instructions which may be in the purchase agreement.
One of their most important roles is getting title insurance. Never forget you need it for a successful closing.
While you’re worrying about final inspections and the nitty-gritty details of your new (or soon to be) new place the closing agent works on closing out the transaction for you.
NOW, TAKE NOTE:
The closing agent is an impartial party in this transaction. All they’re doing is connecting the parties together.
They give information and aid in the transfer of the property from the seller to the buyer. So trust your agent and make sure you get someone who works well with you for this transaction!
Tip: You could consider local businesses for your convenience when needing to deliver any needed paperwork to the location like a power of attorney, deliver an old divorce decree or provide a copy of a trust agreement.
Consider Your Closing Agent Early On
Although you might not speak directly with your closing agent until the end of the purchase process or even until the actual closing day, it’s always a good idea to find your closing agent early.
You want to make sure you get an agent that you can trust. Usually, your mortgage broker or realtor can help you with this decision.
DON’T get just any kind of attorney. You want someone who specializes in real estate and title security.
Think about it.
Would you send a professional flute player to play the lead piano at a big symphony orchestra? Doesn’t make sense right?
It’s the same with choosing your agent.
When you decide on your closing agent, make sure your agent has all your contact details, phone numbers, e-mail, and mailing addresses.
How Do We Work Together?
Other than getting the title, let’s go over the job requirements of your agent and your responsibility in regard to these so you know what the transaction process should be like!
Agent’s job: Obtains title report and arranges for Issuance of policy of title insurance
- Make sure you read and understand the title report thoroughly.
- Check for any of the issues in the report
- Like easements, liens, etc. Check the plat map for correct boundary lines.
- Sign off on agent’s report.
Agent’s job: Prorate costs such as property taxes, insurance, loan interest, and rents, if applicable
- Check all of the proportioned expenses. Make sure you do the calculations well – we don’t want any mistakes in this portion.
Agent’s job: Collect and coordinate paperwork, including financing and required disclosures
- Arrange cash in the form of a Cashier’s check or bank transfer. This should cover the part of the closing costs which you agreed to pay.
- Notice any increase in your deposit that you might have to pay. It may be required after initial purchase agreement was signed and date funds are due.
Agent’s job: Transfer and record deed
- Check the spelling of your name, the manner in which you will hold title, and the description of the property.
- As strangely basic as this sounds, a lot of people are not as careful as they might think when signing official documents. So just BE SURE!
Agent’s job: Transfer your payment to the seller
- Speak directly with other parties. If you aren’t a people person well, this is where you have to get over it. We’re looking for a dream house here!
- Speak to the inspector, real estate agent, mortgage broker, insurance agent, or your attorney to be sure everything is good to go before you hand over your final payment.
- Check and cross-check before the day of closing.
Real estate buying shouldn’t be a traumatic experience and getting the best closing agent for you will the process of the transaction much of a dream as actually landing your new place!
If you are studying real estate terms, be sure to check out our practice real estate exam page for more fun.