Closing is the long-awaited goal of both buyers and sellers. It’s the final step in the transaction at which documents are signed, money changes hands, and ownership is transferred. Closing means different things for buyers and sellers, with each having different tasks and paying a different set of fees. A result of this is that while buyers and sellers usually both have a general idea of what closing is, they aren’t always entirely clear about what happens at the closing table. Read on, then, to find out what you can expect at the closing table when buying or selling a house in Middletown, Dayton, or Cincinnati.
What Is Closing?
Whether you’re buying or selling a house in Middletown, Dayton, or Cincinnati, gaining a better understanding of what closing is will go a long way toward helping you know what to expect at the closing table.
“Closing when the house buyer and seller fulfill all of the agreements made in the sales contract. In more literal terms, it is about the transfer of money and documents so . . . the seller can transfer ownership and possession of the property free and clear to the buyer. Also, [theseller] will pay off all loans that [sheis]still carrying on the house and pay all of the parties who contributed documents or services to facilitate the sale and closing.”
Another point to keep in mind is that closing is frequently referred to as the “settlement.” “[T]he seller, together with the buyer, the buyer’s lender, the sales agents, and the seller’s lender, are ‘settling up’ among [themselves] and all of the other parties who have provided services or documents to the transaction.”
Often, to make this settlement process more secure and to help ensure that all the closing-table tasks happen in one place at one time, a disinterested third party is often hired, typically known as a settlement agent or esrowee. This settlement agent or escrowee “will take in all of the documents, money, and other items needed to close from the parties assigned to furnish them, payout the money necessary to clear title, pay off all of the old lenders and lien holders, and pay the sales agents and other service providers.”
Where Does Closing Take Place?
Most of the time, for both buyers and those selling a house in Middletown, Dayton, or Cincinnati, closing takes place in the escrowee’s office. Typically, the escrowee is the title insurance company (or an agent thereof) insuring the buyer’s title to the property. (Although in a few states the closing table is more likely to be located “at the lender’s office or at an escrow company.”)
There are also a few other possible closing venues and closing methods . ..
- “Upon request, some title or escrow companies will send a mobile escrowee to close in a location convenient to all of the parties.”
- Occasionally, “the buyer’s lender will host the closing and act as escrowee, or bring in a notary or escrow company employee to act as escrowee.”
- The seller’s “attorney, or the buyer’s attorney, may offer his or her office, but recent restrictions in client trust accounting may make it impossible for the attorney to disburse funds immediately, so an escrow company may do the actual transfer of funds.”
- There are also witness-only closings in which a “notary or attorney goes to the closing location selected by the buyer and seller to provide the documents and disbursement services on behalf of the buyer’s lender.”
To find out the most common and best closing-table venue in your area, contact a Middletown, Dayton, or Cincinnati agent at (513) 424-9400.
Common Closing Costs
The typical fees to be paid at the closing table, for both buying and selling a house in Middletown, Dayton, or Cincinnati, fall into two fairly broad categories. These are fees related to the property and fees related to the mortgage
These fees cover the expenses lenders incur in evaluating the property to be financed and include:
- Appraisal fee
- Inspection fee
- Title search
- Title insurance
These fees cover the cost of processing the mortgage loan application and include:
- Credit report fee
- Origination fee
- Application fee
- Underwriting fee
- Local fees
- Legal fees
Who Pays What at Closing?
There are different costs for those buying and for those selling a house in Middletown, Dayton, or Cincinnati. But a typical cost breakdown for buyers and sellers is as follows . . .
Most of the cost of closing for buyers has to do with the mortgage.
- Title insurance – Protects the buyer in the case of liens or clouds on the property subsequent to the sale
- Mortgage preparation – Fees paid to the lender for generating and drafting the mortgage loan
- Buyer’s consents – Includes things like inspections
- Homeowners insurance – A certain portion of the premiums to be paid at closing
- Notary fees – Assessed when closing documents are signed somewhere other than an escrow office
- Government recording fees – For deed and mortgage recording at the appropriate Bureau of Conveyances
- Escrow and title document preparation fees – Typically split 50/50 by buyer and seller
- HOA dues – Usually, two months’ worth of prepaid dues
Closing costs for sellers are a bit different and usually include:
- Mortgage loan payoff – To be paid off in full at the closing settlement
- Agent commissions – Usually paid by the seller, but the buyer often pays too
- Transfer taxes/recording fees – Imposed by state/local government for transferring title
- Escrow fees – Paid to the title company for performing the title search and preparing documents
- Attorney fees – Paid for legal representation at the settlement
- Survey fees – Most often for single-family dwellings to verify boundaries and determine whether there are encroachments
- Liens/judgments – Usually in the form of unpaid HOA dues and/or prorated property taxes and included in the settlement fees.
Consult a Middletown, Dayton, or Cincinnati Agent
Though there is some variation according to location, the typical steps in closing for buying/selling a house in Middletown, Dayton, or Cincinnati are:
- Buyer pays remaining closing costs laid out in the Closing Disclosure.
- Seller signs over the property to the buyer in order to transfer ownership.
- Escrow agent registers new deed to make the buyer the official owner.
- Seller receives proceeds from the sale after the remaining mortgage balance and closing costs are paid.
And if the whole thing sounds more than a little confusing, that’s because it is. It takes a whole team of specialized professionals to finalize the transaction at the closing table. To be prepared, whether buying or selling a house in Middletown, Dayton, or Cincinnati, contact us today at (513) 424-9400.