Closing on a House Checklist: 12 Noteworthy Reminders
What to keep in mind for your Closing on a House Checklist
The following list provides a few uncommon reminders when closing on a residential real estate property in Florida. Consumers and sellers alike should be aware of the following regarding the closing process in Florida:
1. The choice is yours!
- Consumers have the choice of service provider who will handle their transaction. This includes title insurance company or attorney who will close their transaction, their inspector (for the most part). However, in counties in which the seller pays for certain closing costs, they will be entitled to select certain vendors.
- It is important to speak to your lender, real estate agent and title insurance professional prior to selecting your providers. Be sure to consider price, experience and scope of services provided.
2. Protect your Information and Identity
- Be sure to know who is asking for your non-public information. Title professionals and lenders regularly use secured emails to communicate or may require verbal confirmation of certain sensitive information such as wiring instructions.
- If you’re not sure, ask questions! Lenders, real estate agents and title professionals should always accommodate a buyer or seller’s wish to secure their sensitive information.
3. Closing Disclosure statement (CD)
- Most financed real estate closings must be accompanied by a closing statement known as the Closing Disclosure (CD). Although cash transactions do not mandate the CD format, title agents often issue them for these closings as well.
- The Closing Disclosure statement will be sent directly to the buyer and is designed to make it easier for the consumer to understand the terms of the loan and closing costs.
4. Three-day Review Period
- The Lender must deliver the Closing Disclosure to the buyer at least three business days prior to the closing date.
- Delivery of the Closing Disclosure by the Lender via email should always be acknowledged immediately. However, Closing Disclosure statements sent via mail need not require proof of receipt.
- During these three days, the Closing Disclosure statement should be shared with your attorney and title insurance professional.
5. Loan Estimate (LE)
- A lender must send the Loan Estimate (LE) within three (3) days of a loan application being submitted. If there are changes to this LE, you may receive several versions.
- Most terms that appear on the LE will also appear on the Closing Disclosure statement. If there are any changes or discrepancies, your lender is required to provide an explanation.
6. Time is of the Essence
- It is imperative that buyers and sellers work closely with their lender, real estate agents and title insurance professionals to avoid unnecessary delays with their closing.
- All inquiries and correspondences from the lender and title insurance company/law firm should be replied to immediately as they directly affect the progress of the closing.
7. Preparing for Closing
- Within 10-14 days prior to your closing (the time at which all documents are signed and monies transferred), coordination begins between the buyer, seller, their agents, the buyer’s lender and the title insurance professional.
- The buyer should ensure that they have secured all hazard insurance necessary to close their loan.
- Parties should verify all wiring instructions. Title insurance professionals often have rigid verification procedures to avoid fraud, so be sure to discuss with them ahead of time.
8. Lenders Title Insurance Policy
- Lenders usually require buyers to purchase a Lender’s Policy of Title Insurance, the cost of which is usually based on the amount of the loan.
- This type of policy protects the Lender’s interest should any problems arise with the title of the property.
9. Owners Title Insurance Policy
- It is important to understand the value of an Owner’s Title Insurance Policy, especially since Lender’s Title Policies do not protect the buyer.
- This type of insurance policy protects against matters such as ownership challenges, errors and omissions in deeds, undisclosed heir claims, etc. It will also cover attorney fees that arise when there are legal challenges.
- Similarly, to the Lenders Title Insurance Policy, the cost of the Owners Policy is based on the purchase price of the property.
10. Be mindful of post-closing considerations
- Buyers should always make sure the transfer deed and mortgages are properly recorded. Sellers should confirm that all outstanding loans are paid off and satisfactions of those loans have been recorded.
11. Be aware of COVID-19 Related Considerations
- While we are currently on the tail end of this pandemic, Covid protocols must be confirmed prior to the closing date. Parties may prefer to opt for remote and virtual signings, which will have to be arranged ahead of the actual closing.
12. Ask Questions!!!
- Your real estate professionals, including your lender, agents, and title insurance agent/lawyer, are there to answer any questions you have regarding your transaction. Be sure to ask them any of your questions related to your real estate purchase/sale to avoid unnecessary complications and/or misunderstandings.
While it may seem like a simple process, a residential real estate closing can be quite complicated if you are not already used to the process.
While we have presented some of the noteworthy reminders in this closing on a house checklist, it is always best to rely upon professionals to assist you with any real estate closing here in the State of Florida.
If you have questions related to carrying out your closing on a house checklist, it is best to contact a trusted real estate attorney.