Real estate closings can be complex and often confusing. That is why it is best to have a real estate attorney assist with the closing process, especially if you are buying or selling commercial property. Real estate attorneys deal with these types of transactions on a daily basis.
There are certain steps in a closing process that occur in sequential order:
- Submission of title order
- Processing the file
- Title search
- Title examination
- Document preparation
When does step 1 begin?
Once a contract has been signed by a buyer and seller and any required deposits made, the lender or real estate agent submit a title order request to the closing attorney. This is usually a form that includes all of the necessary information regarding the transaction. It can be done online or by paper copy. A copy of the signed contract is submitted with the title order.
What happens in the processing stage?
Most attorneys begin "processing the file" (step 2) as soon as the title order is received. During this stage, necessary information and documentation must be obtained from different parties. Property tax information, homeowner or condominium association information, statements of loan payoffs, inspection reports and hazard insurance certificates must all be collected for the file before ordering the "title search."
What does the title search and title examination involve?
At this stage of the process (steps 3 and 4), a search of the public records in the county where the property is located is performed by a title insurance underwriter. The underwriter prepares a report that includes all records found: deeds, mortgages, any legal pending actions, judgments, easement restrictions, as well as any other documents. The report is then sent to the attorney, who examines all of the records and makes sure all issues are resolved and cleared up prior to the closing.
Documents are prepared by the attorney (step 5) and include a bill of sale, deed, affidavits, and a FIRPTA certificate, as well as a closing statement. Drafts of the closing documents are distributed to all parties for approval or changes in advance of the closing date.
At the actual closing (step 6), the attorney oversees the entire process making sure all documents are signed. When the closing is complete, all parties to receive funds are paid, and the necessary documents are recorded in the county public records.
Source: Federal Title & Escrow Company, "Real Estate Closing Procedure in Florida," accessed Jan. 30, 2018