Proclosers - Kane, Thomas & Brown

Getting Prepared for Your Closing

When Purchacing a home | When Selling a home | When Refinancing a home

Preparing for a 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 are not required to attend the closing, though you certainly may.

What if You Can't Attend the Closing and You are on the Loan?

If you are unable to attend your closing, it is possible that you may be able to close by Power of Attorney. 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 to your loan. Note: the language used in a General Power of Attorney usually does not comply with the requirements of a Specific Real Estate Power of Attorney. Furthermore, most lenders require approval before they will allow a Borrower to close by Power of Attorney. The point here is quite simple: as soon as you realize you will be unable to attend the closing, please notify our office immediately so that we may contact your lender for permission to close by Power of Attorney and so that we may prepare a proper document for you. You should know that there will be a nominal fee for the preparation and recording of this deed.

Information Required from You Prior to Closing:

In 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!
Survey
A few years ago, it was rare that a lender did not require a survey for closing, especially for FHA or VA loans. Today the exact opposite is true: lenders very seldom require a purchaser to obtain a survey for closing. However, after you read the information below regarding surveys, you may determine that it is something you would like to purchase before closing. Our office will need to know this so that we may order one on your behalf. The process is simple: just call one of our closing coordinators and ask that one be ordered for you. The cost will be included on the settlement statement at the closing and will generally be a charge between $250-$350.
Lender Required Information
It is not unusual that your lender may require you pay certain debts, write letters of explanation regarding your credit, or provide income tax information in order to obtain a loan. If the lender does require you to pay off accounts at closing, please call our office with your account numbers and account addresses since our office will be handling the disbursement of funds to these creditors. You may wish to bring account statements to the closing to ensure that all the correct information has been provided to us.
Employer Contributions to Closing Costs
If you are moving due to a company transfer, it is not uncommon that your employer will contribute funds to your closing costs. If this is the case for you, please contact our office with the name and telephone number of the person at your company who is handling this on your behalf. We must have this information so that we can provide you with an accurate estimate of the funds you will be required to bring to closing.

Services that Protect You as a Homeowner:

Surveys As discussed earlier, nowadays 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. That is, if your soon-to-be neighbor has a fence that is actually over on your property line, a survey will show it. We often hear purchasers of new houses refuse to purchase a survey because they are buying new construction and believe therefore there won't be any encroachment issues. This is not exactly the true. Building set-back violations and driveway encroachments caused by builders are some of the most common issues that are discovered by a survey.

You might wonder why you would need a survey if a plat of your subdivision has been recorded at the county courthouse. A subdivision plat shows where the boundary lines of each lot are supposed to be and where building lines, Homeowners Association setbacks, drainage easements and access easements exist. However, the plat does not display where your house exists in relation to these restrictions. Only a survey drawn for you property will reveal this information.

Again, the cost of a survey will be about $250 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 about 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. The cost of the policy is determined by a rate chart issued by the title insurance company. If you would like to know how much a policy will cost, please contact our office, and we will be happy to calculate the fee for you. 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.

A Check-list for Closing:

The following is a list 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 ORIGINAL Homeowners Insurance Policy
The lender will require us to remit to them an original 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.
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 $1000. 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.
Information Required by your Lender
If the lender requires you to pay off certain accounts at closing, you may wish to bring account statements to the closing to ensure that all the correct information has been provided to us. Also, it is not uncommon that the lender requests a borrower to bring copies of past tax documents. If your lender does so, you must bring these items to the closing or else the lender will refuse to fund your loan. If you have recently sold a home prior to your purchase, it is likely your lender will require a copy of the settlement statement pertaining to that transaction. Please be sure to bring a copy to the closing.

Preparing for Closing as a Seller:

What Is a "Closing"?

A closing in Georgia consists of all the parties to the transaction meeting to execute necessary documentation under the direction of an attorney 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. Anyone who holds title to a property that is being sold must attend the closing. If you are not on title, but your spouse is you are not required to attend the closing though you certainly may if you wish.

What if You Can't Attend the Closing and you're on Title?

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.

Information Required from You Prior to Closing:

In order to prepare your file for your closing, our office will require several items of information from you about the sale of the home.

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 or specify any repair items that should be paid by the seller.
Mortgage Payoff Information
It is vital that our office obtain information relating to the loans that you will be paying off at closing. Part of closing is the conveyance of clear title from you, the Seller, to the Purchaser. This requires that all debts owed by you secured by the property must be paid-this would include all first mortgages, second mortgages and any equity lines of credit. As the closing attorney, it is our responsibility to obtain a payoff statement from your mortgage company, but we will be unable to do so without your information. We will need the following from you immediately:
1. The name of your lender(s);
2. The lender's customer service phone number; and
3. Your loan number for each loan you have secured by the property you are selling.
Your Forwarding Address
We will need the address of the new home you are moving to. Our firm requires this information for several reasons. First, as the settlement agent, we are required to file tax information regarding the sale of your home to the Federal government. Secondly, because we will be handling the payoffs of your debts, including your home mortgages, it is often necessary that we provide these companies with a means to reach you. They may need to contact you regarding refunds of escrow deposits or an overpay, and we simply need a way to direct them. Third, we may need to contact you regarding a post-closing matter.
Your Social Security Number
As stated before, our firm is required to file information regarding the closings we handle, and the parties involved. Therefore, we need this information.
Homeowners' Association/ Condo Association Information
If your home is located in a subdivision that is subject to a mandatory homeowners' association or condo association, it is necessary that we have information to contact the treasurer's office or billing department of the association. The reason for this is that we must ensure that all debts relating to the association are paid, and that we make the proper pro-rata credit to you for the dues that you have already paid.
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 sellers' 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. The reason for this is that many loan programs require certain language be on the termite letter (for example, FHA and VA loan programs will not allow the letter to state "Earth to Wood Contact"). If our office is given the opportunity to review the letter prior to closing, we may be able to avoid some last minute scrambling.
An Owners' Title Policy
If you purchased an Owners' Title Policy at the time you bought your home, you should be sure to provide a copy of it to your real estate agent if you have one and also to our office. This will assist our title examiners in their work, as well as assist our pre-closing staff as they work to ensure clear title is conveyed by you to your purchasers.

What will Your Proceeds Be at Closing?

In calculating what your proceeds will be at closing, you should know that you will be required to deduct a number of items from the sales price you are receiving. These items will be the brokers' commissions, your mortgage(s) payoff amount, the cost of the termite letter, any repair bills to be paid at closing, any taxes you may owe, the transfer tax fee imposed by the state, and any seller paid closing costs.

What Should You Bring to Closing?

The following is a simple checklist of items you should bring to closing:

Yourself and Whomever else Holds Title to The Property Being Sold
That's right. All of you must attend, unless, of course, a Power of Attorney is involved. In that case, the original Power of Attorney document must make it to closing along with a copy of the absent party's photo ID.
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.
Termite Letter
As the Seller, it is usually your responsibility to provide a termite letter for closing. Without it, the Buyer's lender may refuse to fund the loan, prohibiting our office to disburse your proceeds to you at closing-a very serious consequence! Please be sure to bring this important document to closing.
Mortgage Statements and Original Invoices
Although you are not required to do so, you may wish to bring copies of your most recent mortgage statements to verify the payoff amount we have calculated is correct. You might also want to bring any invoices that are being paid from your proceeds to ensure that all the proper bills are paid.
Certified Funds
It is possible that you will be required to bring funds to closing. Funds should be either in the form of a Cashier's Check or Wired Funds from your bank. We will be able to provide you with the exact amount you should bring as soon as we obtain your payoff statements from your mortgage company, determine the commission you are paying, and have received the invoices for the bills to be paid out of your proceeds at closing. This is will usually occur somewhere between 72 and 24 hours before the closing. 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 $1000. 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.

Preparing for a Closing when Refinancing

What Does the Closing Involve?

You probably remember your closing experience from when you purchased your home. It involved signing your loan documents, having the seller sign documents relating to your title, and was attended by real estate agents, the sellers, yourself and perhaps your loan officer. A closing for a loan refinance simply involves the execution of your new loan documents and will likely be attended by only the attorney, yourself and your loan officer.

What if You Can't Attend the Closing and You're on the Loan?

If you are unable to attend your closing, it is possible that you may be able to close by Power of Attorney. 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 to your loan. Furthermore, most lenders require approval before they will allow a Borrower to close by Power of Attorney. The point here is quite simple: as soon as you realize you will be unable to attend the closing, please notify our office immediately so that we may contact your lender for permission to close by Power of Attorney and so that we may prepare a proper document for you. You should know that there will be a nominal fee for the preparation and recording of this deed.

Information Required from You Prior to Closing:

In order to prepare our files for closing and to obtain your closing package from the lender on time, we will require the following information from you prior to closing:

Hazard Insurance
You will be required by your new lender to have hazard (or Homeowners') insurance with coverage in the amount of the loan you are obtaining from them. Also, the new lender will require that their mortgagee clause and your new loan number be added to your policy. Our office can notify your insurance agent of the changes to be made. Therefore, it is imperative that you call our office and provide us with the following information: your insurance agent's name, telephone number, and your annual insurance premium amount. 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!
Mortgage Payoff Information
It is important that our office obtain information relating to the loans that you will be paying off at closing. This would include all first mortgages, second mortgages and any equity lines of credit. As the closing attorney, it is our responsibility to obtain a payoff statement from your mortgage company, but we will be unable to do so without your information. We will need the following from you immediately:
1. The name of each of your lenders;
2. The lender's customer service phone number; and
3. Your loan number for each loan to be paid off in the refinance.
Your Social Security Number
As stated before, our firm is required to obtain your payoff information. Often, we cannot obtain the information we need without your Social Security number.
Homeowners' Association/ Condo Association Information
If your home is located in a subdivision that is subject to a mandatory homeowners association or condo association, it is necessary that we have information to contact the treasurer's office or billing department of the association. The reason for this is that we must ensure that all debts relating to the association are paid, and that we make the proper credit to you for the dues that you have already paid.
Termite Letter
Some lenders will require a termite letter to be completed within 30 days of a refinance closing. If your lender makes this request, 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. The reason for this is that many loan programs require certain language be on the termite letter (for example, FHA and VA loan programs will not allow the letter to state "Earth to Wood Contact"). If our office is given the opportunity to review the letter prior to closing, we may be able to avoid some last minute scrambling.
An Owners' Title Policy
If you purchased an Owners' Title Policy at the time you bought your home, you should be sure to provide a copy of it to your real estate agent if you have one and also to our office. This will assist our title examiners in their work, as well as assist our pre-closing staff as they work to ensure clear title is conveyed.

What You Should Bring to Closing?

Yourself and your fellow debtor(s)
Whoever 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.
Lender Required Information
If the lender requires you to pay off certain accounts at closing, you may wish to bring account statements to the closing to ensure that all the correct information has been provided to us. Also, it is not uncommon that the lender requests a borrower to bring copies of past tax documents. If your lender does so, you must bring these items to the closing or else the lender will refuse to fund your loan.
Termite Letter
If your lender has required a termite report be prepared on your home, you must bring it to closing.
Certified Funds
It is possible that you will be required to bring funds to closing. Funds should be either in the form of a Cashier's Check or Wired Funds from your bank. We will be able to provide you with the exact amount you should bring as soon as the final closing instructions have been received from your lender. This is 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 $1000. 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.