The real estate sector is a large part of the local economy in Florida with a steady, substantial number of residential and commercial real estate closings occurring. While title company representatives fully understand the real estate closing process as they are involved in real estate closings every day, many of the other participants in Florida real estate transactions may have some confusion as to everything that happens from the time of signing the sale purchase contract to the date of closing.
We want to help you understand this closing process and the basic steps that are customarily followed in every Florida real estate transaction so that buyers, sellers, real estate agents, lenders and other interested parties will have a better understanding of the many actions taken by the title agents at SETCO to successfully close a real estate transaction.
Submission of the title order
After a purchase and sale contract is signed between the buyer and seller and the initial escrow deposit is made by the buyer, the buyer's lender (if the transaction is being financed) or the buyer's real estate agent (if the transaction is a cash transaction) will submit a request for title to the title company representative chosen by the buyer to start the process.
Typically, the buyer's lender or real estate agent will complete and send a one or two page form to the title company representative which contains all of the relevant information related to the transaction such a party names, property description, purchase price, lender information and existing mortgages. Most title companies also have pages on their websites where the buyer's lender or real estate agent can electronically complete and send in the request for title. At SETCO, we use Paperless Closer to handle all of our electronic document needs. The buyer's realtor will also typically send a copy of the signed purchase and sale agreement to the title company representative at this point.
Processing the file
The processing stage of the transaction begins immediately after the title company representative receives the request for title. Many third parties are involved in the real estate process who must be coordinated with in order to obtain all necessary information and documentation in time for the closing date. Our experienced title company representatives will commence the processing stage as soon as possible after the receipt of the request for title.
The file processing stage includes ordering tax information that shows the status of current and prior years taxes, loan payoff statements, surveys, homeowner or condominium association estoppel letters showing maintenance fees and any assessments, inspection reports, and certificates evidencing hazard insurance. In addition, at this stage the title search report is ordered from the title insurance underwriter and the lien and judgment search report from the lien search company.
During the title search phase of the transaction, a thorough search is made of the public records in the county in Florida where the real property is located. Records searched and located include deeds, mortgages, lis pendens, judgments, easements, restrictive covenants, liens, divorce settlements and any other documents recorded in the public records which affect title to the property. After all of the documents are located, the title insurance underwriter prepares a title search report, which includes all such documents and sends it to the title company representative.
After the title search report is received from the title insurance underwriter, the title examination phase commences. The title company representative will first issue a title commitment to the buyer (and if applicable, the lender) based upon the information contained in the title search report.
Next all of the documents found during the title search will be examined that affect the title to the property in order to determine the current status of title and whether any title clouds exist which need to be cleared prior to closing. The title company representative also verifies the recorded legal owner of the property and makes note of any debts owed against the property.
After any and all title clouds have been cleared and the parties are ready to close the transaction, the title company representative will proceed to prepare all of the documents in order to close the transaction, which includes the deed, bill of sale, affidavits, FIRPTA certificate, and closing statement.
In connection with this, if the buyer is financing the purchase, the buyer's lender will submit to the title company representative its closing instructions so that all of the lender's charges, fees and escrows can be included on the settlement statement.
Drafts of all of the closing documents will be distributed to all interested parties in advance of closing so that they may be reviewed, commented on, revised, if necessary, and ultimately approved well in advance of closing.
Settlement: Closing the Transaction
Once all of the closing documents have been approved, a date and time to close the transaction is scheduled. At the closing your title company representative oversees all aspects of the closing of the purchase and sale transaction and answers any questions the parties may have which relate to the transaction and/or the closing documents.
The seller signs the deed and the other seller documents, the buyer signs the buyer's documents and the loan documents (if the transaction is being financed), and both parties sign the HUD-1 settlement statement.
After the closing has occurred the seller, real estate agents and other parties to the transaction are paid and certain documents are sent to be recorded in the county in which the property is located.
To see what SETCO offers on our website for lendors, buyers/sellers and real estate agents check out our Services to see how we can help you make your real estate transaction easier.
We at SETCO would love to help you walk through the process of your real estate closing procedure. Check out our locations to see which is closest and best for your real estate needs and our team of representatives will be glad to help you get started on this process or answer any questions you may have.