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Buyer's Perspective: How is the Closing on a Home Divided?

From the buyer's perspective the closing can be divided up into three activities:

1. Reviewing and signing of loan documents.
These can include mortgage, note, affidavits, Truth in lending statements, estimate of closing costs, escrow statement letter, which outline how much will be paid in to the real estate taxes and insurance escrows.

2. Exchange of documents between the buyer, seller and the title or escrow company.
The buyer and seller must sign specific documents related to the transaction and the tilt company representative may need to sign some of these too. The buyer will be presented with documents form the seller for review and verification that they are correct. These include:

  • The deed
  • The bill of sale
  • The affidavits of title
  • Documentation required by the contract such as radon or lead
  • inspections
  • Insurance certificate
  • Property survey
  • Condo assessment full payment cert
  • Co-op assessment full payment cert
The tile company will require that any documents related to the purchase or sale of a home for the Internal Revenue Service to be signed. They will also require any documents related to the title to be signed at this time including the following:
  • RESPA HUD-1 statement, which is really a detailed explanation of who paid what and how much. This is signed by the buyer, seller and title company representative. The RESPA HUD-1 Statement outlines who pays what on everything from pro rations on taxes and assessments for Condos and co-ops to loan charges related to items payable in connection to the title to government charges for the transaction. This is a document you need to keep in your newly created home file.
  • Statements about any matters that could ultimately affect title to the property such as lawsuits. Disclosure statements about any tenants other than the buyer or seller that occupies the property.
  • Disclosure statements related to construction contracts entered into within the past three to six months.
The buyer will also be asked to sign sanity documents that states you have not been declared mentally incompetent and that you are still employed at the same place and are over eighteen years of age.

3. Distribution of Funds.
The tile company will generally disburse funds once all the other documentation is signed, dated and notarized. Because everyone usually gets paid out of the closing proceeds, the title company will not accept personal checks. You must bring a cashier's check. Your lender will be able to provide an estimate of closing costs prior to closing (see "Closing Costs" in this section).

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