Preparing For Closing As A Purchaser
What Is a "Closing"?A closing is the process by which title to the property is transferred from the seller to the purchaser and the buyer's loan is finalized. This occurs once the loan is approved, title work is complete, and no problems prevent completion of the transaction.
A closing in Georgia consists of all the parties to the transaction meeting to execute necessary documentation under the direction of an attorney usually chosen by the lender. The closing attorney represents the lender where a loan is involved and either the seller or purchaser in the instance of a cash closing.
Who Attends the Closing?The closing is attended by purchasers, sellers, real estate agents, and usually loan officers. As a purchaser, you are expected to attend closing if you will be executing loan documents. If you are purchasing a property with a spouse or other party but you are not on the loan, you will still be required to attend the closing if you are on the Security Deed.
What if You Can't Attend the Closing and You are on the Loan?If you are unable to attend your closing, please call our office as soon as possible so that we may prepare a Power of Attorney for your closing. In such an instance, you will execute a Specific Power of Attorney form appointing another party as having power to execute documents on your behalf. However, not any Power of Attorney form will do: the document must be specific to real estate and refer to the property you are selling in particular. While those forms at Office Depot may seem convenient and helpful, it is unlikely that they comply with the Georgia real estate Power of Attorney requirements, and will therefore be invalid. Hence, it is probably best if our firm prepares this document for you. Please contact our office as soon as you realize that you will be unable to attend the closing so that we may prepare this document for you. You should know that there will be a nominal fee for the preparation and recording of this deed. There is no charge to have this document executed in our office prior to the closing. The execution involves the signing by the party who will not attend. A witness and notary is present to witness your signature. If the party who will not be able to attend the closing is unable to come to our office prior to the closing to execute this document, our Title Insurance Company requires that we locate a Title Company or Attorney where the signing party may go to have this document executed. In this case, there is a courier fee to have the original document sent to our office prior to closing as well as a fee which may be charged by the Attorney or Title Company who provides the witness/Notary service.
Information Required from You Prior to ClosingIn order to prepare our files and obtain your closing documents from the lender in advance, several items of information will be required from you before closing.
The Sales Contract You will need to be sure that our office has received the most up-to-date version of your sales contract. This includes any amendments that affect the sales price of the home, affect the amount of earnest money that you have paid, or specifies any repair items that should be paid by the seller.
Hazard Insurance You will be required by your lender to obtain hazard (also known as Homeowners') insurance for your new home before closing with coverage in the amount of the loan you are obtaining from your lender. Once you set up your policy with your insurance agent, it is imperative that you call our office and provide us with the following information: the agent's name, telephone number, your insurance premium amount and whether or not you've paid the premium or expect to do so at the closing. Believe it or not, this little bit of information is absolutely vital-without it the lender will refuse to allow a closing, so please, please, please make this a priority!
Services that Protect You as a HomeownerSurvey: It is uncommon for lenders to require an buyer to obtain a survey in order to obtain a loan. However, this may be an item you wish to purchase on your own because of the tremendous benefit to you in having one. A survey is essentially a map of your property which shows where your house lies on the property. The surveyor will also indicate where easements, building lines and county set back lines exist on your property. By obtaining a survey, you will be able to determine if your property is in violation of any county requirements or homeowners association restrictions, or if your house is in a flood zone. The survey will also set out any encroachments if they exist.. The Plat Map of your subdivision does not display where your house exists in relation to these restrictions. Only a survey drawn for you property will reveal this information.
The cost of a survey will be about $350 for the typical lot in metro Atlanta, and will be more for a larger tract of land. If you decide you should have a survey, please contact our office at least a week before closing so that we can provide you with your new survey at closing.
Owners Title Insurance: When your new lender provides you with your Good Faith Estimate, you will notice a charge for "Lenders Title Insurance." Title insurance protects the holder of the policy in cases where a third party makes a claim to the title of the property. The claim may be based on an assertion of fraudulent conveyance or a forged document, etc. The insurer will defend the insured's title on their behalf. You should know, however, the Lender's title insurance policy will not protect your interest in your home. Therefore, if a claim is asserted after your purchase and you do not have title insurance, you could lose a lot of money defending your title in litigation, or worse, you could even lose your home.
You may wonder why you would need title insurance if our office is required to examine title prior to closing. The reason is that although a document affecting your title has been filed at the county courthouse, it may be weeks, even months before that document is noted in the courthouse index. Therefore, a title examiner would not be able to find that document in his title examination. Furthermore, even the best title exam cannot determine whether or not a document was forged or fraud was involved in a conveyance. More importantly, it is impossible for a title examiner to know if a document affecting your title has been mis-filed in the county records, or exists without having been filed. These are the type of risks that an Owners' Title Policy will insure you against.
The cost of title insurance is a one-time fee at closing and it is effective for as long as you own your home. It is our policy to automatically include the fee for Owners' Title Insurance in the calculation of the Buyer's closing costs. However, if you wish to refuse coverage, we can remove the fee from your charges.
What Should You Bring to Closing?The following is a simple checklist of items you should bring to closing:
Yourself and your fellow debtor(s) Whomever is on the loan documents must be at closing (unless of course you have executed a Specific Real Estate Power of Attorney and our office has the original copy or it is brought to closing).
A valid Photo ID (A Drivers' License, Passport or Military ID will work) Each borrower must provide a valid ID at closing. It may seem strange, but the title companies require us to obtain a copy of your ID just to make sure no imposters are executing documents in your name.
Your Homeowners Insurance Policy The lender will require us to remit to them a copy of your homeowners insurance policy. Your insurance agent should provide you with a copy to bring to the closing. Please remember it. Without it, closing cannot be completed.
Termite Letter Most lenders will require a termite letter to be completed within 30 days of closing before the buyer's loan is funded. The Georgia Association of Realtors contract makes the termite letter the Buyers' responsibility. You must bring the original termite letter to closing, but we ask that you fax a copy to our office so that we may review it before we get to closing.
Certified Funds It is most likely the case that you will be required to bring funds to closing. These funds should be either in the form of a Cashier's Check or Wired Funds from your bank or a proceeds check from the sale of your prior home issued by the local closing attorney who handled the closing. We will be able to provide you with the exact amount you should bring to closing as soon as the final closing instructions have been received from your lender. This will usually occur somewhere between 72 and 24 hours before the closing. If you prefer to obtain your funds before that time and do not know the exact amount, it is usually best to obtain funds in the amount provided by your loan officer in your Good Faith Estimate. If you bring an amount to closing that is over the amount required, we will provide you with a check for the difference. If the amount you bring is less than the amount required, you may supplement it with a personal check. It is our firm's policy not to accept a personal check for an amount greater than $500. Please make your Cashier's Check out to yourself, and you can endorse it to us at closing. If you wish to wire your funds, please contact our office so that we may fax wiring instructions to your bank. Please note that there will be a nominal wiring fee for wires received by our office.