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by Joe Powell
Closing is the time and place that the borrower meets
with the closing agent to review and sign all the documents
necessary to “close” or
complete the process of purchasing real property and securing the debt.
Once a party determines a loan will be needed to buy
real estate, application is made to a lender. After the
loan is approved, the lender contacts the closing agent
to set up a closing and order title insurance.
Main Avenue Title Company, Inc. examines the title to
the subject property and issues a title insurance commitment.
Spruell & Powell, LLC serves as closing agent and attorney
for the closing.
Title insurance is required to secure the loan amount
for the lender. Title insurance is also available to insure
the owner’s full property value. These premiums,
unlike traditional insurance, are paid only once at closing
and range from $2.50 to $3.50 per thousand dollars property
value insured.
The closing agent then organizes and coordinates the closing
and communicates with and collects documents and information
among the mortgage lender, the borrower’s property
insurance carrier, the property tax and land records office,
the termite bond inspector, land surveyor, realtor, buyer
and seller. All this data is compiled into a closing package
for the closing conference. Preparation for a closing consumes
a significant amount of time for the lawyer and professional
staff of the closing agent. This allows the closing conference
itself to take only about 30 minutes to conduct with the
lawyer and interested parties, during which time a number
of papers are signed and funds are exchanged. Afterwards,
the closing agent handles the recording of the deed and
mortgage and other documents at the courthouse as well
as the disbursement of funds to parties with an interest
in the closing. The closing agent prepares a complete copy
of all these documents and sends this to the mortgage lender
to complete their file and to the property owner for permanent
safe-keeping. Once the required papers are filed of record,
a final title policy of insurance is issued.
The total standard settlement fee for closing services
is $450.00 payable to the closing agent and represents
the professional time of the lawyer and closing staff in
preparing documents and conducting the closing and handling
the post-closing paperwork as well as expenses incurred
in the process, such as courthouse copy and research charges,
postage and overnight express mail costs, regular office
overhead, and bank wire transfer fees.
Additional funds are collected at closing and referred
to as closing costs such as the lender’s loan origination
fee and other banking surcharges, realtor commissions,
escrow deposits for property taxes and insurance, prorated
property tax payments, termite bond transfer and inspection
fee, survey fee, credit report fee, and flood certification
fee, among others. These costs will vary depending on the
amount of the loan and requirements of the lender or the
real estate sales contract.
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