Introduction and Brief Overview
The real estate closing is the event which officially transfers the ownership of a property from seller to buyer. The closing is also called “completion.” While real estate transactions take place in every state, it’s important to understand that each state can follow different rules. Even some counties within a state can modify the way they deal with a contract and close the transaction.
This may be important if one party to the transaction is from another state or is being advised by, say, a family member who is not familiar with Ohio laws and practices. Sitting around the closing table can be emotional in different ways; some people are excited to move into their new home, and others may be sad because they are selling. Some people treat it as a purely financial transaction. Most people only buy or sell occasionally; knowing more about the closing in advance should take some stress out of the situation and help everything go smoothly.
Real Estate From Contract to Closing
The buyer and seller agree the purchase and sale terms and sign a contract. In some parts of Ohio, Toledo for example, there is a three-day attorney review period when the legal representatives review the contract and advise their client on the small print. In other parts of the state that is not usual; it pays to speak with a real estate attorney before documents are signed to avoid any surprises. As was said above, different areas have different customs.
Once the contract is signed and communicated a title agent and real estate closing agent is selected. This can be the same person and is often chosen by the lender, if the buyer is taking out a mortgage on the property, or by one of the real estate agents. The seller and buyer have a right to personally select the closing agent. It is worth remembering that the title agent represents the title insurance company, and not either the buyer or seller; so if someone wants to be personally represented, they should choose their own attorney.
The real estate closing agent’s role is to manage the legal side of things. The lender will want an appraisal carried out, the buyer will have agreed inspections done, and the seller will be responsible for agreed repairs following the inspections. During this time the title agent will perform legal searches to ensure there are no “clouds” on the title, so the title insurance company can issue both lender’s coverage and owner’s coverage.
Wrapping Things Up
When all such pre-closing work is complete, the closing can take place. Prior to closing the seller and buyer will receive copies of the real estate closing statement for review. The buyer will also receive confirmation the loan has been approved, etc. Both parties may have these documents explained to them by their attorney or the closing agent who issued the paperwork. It is always good to seek explanation to avoid either taking time at the closing table to have everything explained or feeling pressured to sign papers that are not fully understood.
The Real Estate Closing
It is usual at the closing for all interested parties to be present so they can both sign necessary documents and confirm that everything that should be done has been done. Any existing loans on the property are paid off, closing costs, as listed on the closing statement are paid, the escrow, or good faith deposit, is used, the buyer pays any remaining down payment, the new mortgage is finalized, the seller receives their “walk-away” money, and the real estate agents receive their commissions.
It is usual for all parties to attend the closing at the same time. The meeting is chaired by the closing agent who has all documents and checks to hand. After all paperwork is signed, and payments completed, the ownership of the property legally transfers to the new owner. They then receive the keys to the property.
After the real estate closing the closing agent sends legal documents for recording in public records. Ohio is a lien theory state, so the title deed is given to the new owners at closing, not to the mortgagee.
Closing a real estate transaction is an important event that takes about an hour. It can feel fast-moving, so it is a good idea to have the proceedings described beforehand. You should have all legal details fully explained. If you would like to learn more about real estate closings in Ohio or to ask us to represent you in a transaction, please click here to contact us.