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Sold! What Happens Next?
The Basic Steps
Now that you have decided to buy a home, what happens
between now and the time you can become the legal owner?
First, your loan application will have to be approved. In doing
this, the lender will include a credit check on you and require
an appraisal and survey of the property. Legal papers will be
prepared for you (and the seller) to sign. This will include a
new deed, note and mortgage. The title to the property will be checked to determine what debts are owed against the property and who is the legal owner.
Finally, when all things are in order, the settlement ("closing") will take place. The seller will sign the new deed to you and you will sign a new note and mortgage. The old loan on the property will be paid off
and the new loan set up. The seller, realtor, attorneys, title company and others performing services for you will be paid. Title insurance policies will then be issued to you and your lender.
What Title Companies Do
"Six Steps in Transferring a Land" describe what title companies do. Title
companies and their agents, search, examine, close and insure land titles. Title insurance policies are issued to the homeowner and the lender, assuring them financial protection against adverse title claims or risks. Equally important, potential title claims that surface in the process of insuring a title can be resolved by the parties prior to closing their transaction.
1. ORDER IS TAKEN
- An "escrow contract" (agreement to close) starts the process.
2. TAX CHECK
- What taxes are owed on the property? The various assessor-collectors are contacted.
3. TITLE SEARCH
- Copies of documents are gathered from various public records; deeds, notes, paving assessments, liens, wills, divorce settlements, etc.
4. EXAMINATION
- Verification of the legal owner and debts owed.
- Forms are prepared for settlement.
5. TYPING
6. SETTLEMENT
- Escrow officer oversees closing of transactions; seller signs deed, buyer signs new mortgage. Old loan is paid off, new loan is set up. Seller, Realtors, attorneys, title company and others are paid.