After much saving and planning the time has come to finally close on your real estate purchase. At the closing you will pay for your real estate purchase, the lender (if you have one) will fund your loan and the seller will transfer the title into your name. Although it sounds easy enough, all these tasks require a heap load of paperwork. Signing the documents necessary for the purchase is the longest part of the closing. If you familiarize yourself with the documents beforehand the process will go much faster and smoother. Here are some documents to look out for in the paperwork for your closing.:
Lender Documents:
- The Note. The Note states the amount of your debt with the lender, your interest rate, and the terms of interest change (if any) and also provides evidence of your debt. The Note is valuable in itself. If your lender sells your loan (which is common), it will have to physically transfer the note to the new loan purchaser.
- Mortgage. The Mortgage (or deed of trust) is what secures the loan to the property. You will be essentially putting up the property as collateral for the loan. The Mortgage is recorded with the county clerk and acts as a lien against the property meaning that the lender can foreclosure on your property for failure to pay.
Various other documents will be included in the loan package. For example, forms W-9 and 4506 from the IRS allow the lender to report your mortgage interest and to obtain copies of your tax return. There are many disclosures such as a servicing disclosure which tells you what servicer the lender will use to collect your payments and where to send your payment. Escrow documents will also be included allowing the lender to charge and hold funds to pay the property’s taxes and insurance premium. There will also be affidavits that can confirm your legal name and what the property will be used for.
Transfer Documents:
- Deed. The deed transfers the property from the seller to the buyer. Depending on what state the sale/purchase is in there will be different language. In Florida ownership takes title in such forms as: individually, as joint tenants with rights of survivorship or other tenancies, and in trust. The deed must be recorded with the clerk in the county in which the property is located. Recording the deed makes a “chain of title” so anyone looking at it knows who is the owner and the prior owner.
- Title Affidavit: The name varies with states in Florida it can be Title Affidavit or Seller’s Affidavit. This document is a sworn notarized statement confirming the ownership of the property and that it is clear of any title defects such as liens, judgments, or any work done on the property which can create a lien.
- Bill of Sale: This transfers all the personal property being sold along with the property. Personal property can be anything from appliances to furniture.
Before any of these documents are procured the title company who is facilitating the closing will have a Title Commitment (the “Commitment”) which will show who owns the property and if there are any problems with the title that can prevent the property from being legally transferred. The Commitment should be reviewed by an experienced real estate attorney to make sure that title is in the condition which was promised in the contract. Along with all the documents mentioned here there will be other documents and affidavits that a title company and the lender will ask you to sign to be able to fully transfer title. It is always best to have an experienced real estate attorney look over all documents to make sure you are securing marketable title. An attorney will make sure your interests in the purchase are secured.
If you have any questions or concerns regarding your real estate closing and remote notarizations feel free to contact us at 305-227-4030 or legal@raygarcialaw.com
Law Office of Ray Garcia, P.A.
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