The 11 Basic Steps that Make Up the Closing Process [infographic] | Bright Law, PLLC

The 11 Basic Steps that Make Up the Closing
Process [infographic]

Even if you have purchased or sold real estate before, the steps associated with the closing process may still be a bit hazy. Each step composing the closing process is outlined below. Please let us know if you have any questions or if you would like to schedule a closing with us at Bright Law, PLLC.

The 11 Basic Steps that Make Up the Closing Process [infographic]

  1. Contract reviewed—After the buyer and the seller sign the contract, the law firm reviews the final sales contract to ensure the terms of the deal are carried out at closing.
  2. Engagement letter signed by client—The buyer and seller sign the law firm’s engagement letter that outlines the roles and duties of the law firm handling the closing.
  3. Info sheet filled out by client—This form goes over all information needed to ensure a smooth, error-free closing process.
  4. If the Property has an HOA: HOA Certification—This form, required by the lender and the law firm to confirm HOA dues & assessments, provides information regarding the number of units within a community, any notices of pending litigation, and the status of any assessments and reserves.
  5. Attorney completes title search (buyer)/Loan payoffs are ordered (seller)—At this stage, the buyer’s attorney completes a title search and orders the loan payoffs for the existing property on the seller’s behalf.
  6. Title commitment ordered and received—The title commitment is the title company’s guarantee to issue a title insurance policy for the property during the closing process.
  7. HUD-1 (For Cash Transactions) or Preliminary Closing Disclosure (If Lender Financed) Created—This form outlines the final financial terms of the transaction, including the mortgage loan selected by the buyer, which includes the projected monthly payments, fees, loan terms, etc., as well as any seller paid closing costs, real property taxes, HOA dues & assessments, real estate broker commissions, and any other financials that may be part of the transaction.
  8. Seller closing documents prepared/Lender closing documents received (if applicable)—Closing documents for the seller are drawn up at this point, and the closing documents for the lender on behalf of the lender are collected.
  9. Settlement—At settlement, all documentation relating to the sale of the property is signed.
  10. Documents recorded with the county—The deed and any other necessary documentation associated with the sale is recorded with the county where the property is located. Recording of the necessary documents is the “closing” of the transaction.
  11. Funds disbursed—All funds for the sale and purchase of the property are disbursed according to the HUD-1 or closing disclosure.