What happens after the buyer and seller have agreed to the price terms and closing date ?
We understand the home buying process can be a little confusing, so we have put together these steps to help you better understand what happens after the contract is signed.
Step 1: Earnest Money Deposit
The buyer makes an initial deposit in an amount agreed upon between the parties, and those funds are placed into an escrow account as shown on the contract (or in the escrow account stated in the contract). Some realtors hold the escrow deposit, and sometimes Florida Sun Title holds those funds pending the closing of the transaction. The escrow agent is usually stated on the first page of the contract.
Step 2: File Processing
When Florida Sun Title receives the contract, we begin gathering the necessary information to process the title order. We contact the buyers, sellers, realtors and lenders, if applicable.
Step 3: Title Search and Municipal Lien Search
Florida Sun Title orders the title search, municipal lien search, and HOA Estoppel (if the property is located in a Home Owners Association or Condominium Association).
Step 4: Survey
We work with the buyer to order a survey of the property. Lenders usually require survey coverage on their title policy. If a buyer is not obtaining financing, it may be a good idea to order a survey but a survey is not required in order to close. However the owner’s title policy will exclude from coverage any matters that may appear on a survey of the property if there is no survey obtained.
Step 5: Insurance
The buyer should obtain a dwelling policy, windstorm coverage and flood insurance, in some cases, to insure their new home. These insurance coverages are usually required by all lenders, and buyers should expect to pay the first year premium prior to closing. After closing, the buyer’s monthly mortgage payments may include payments to an escrow account set up for them by their lender, where the lender will pay the renewal insurance policy, and pay the annual tax bill in November.
Step 6: Title Commitment
Florida Sun Title obtains a title commitment (i.e., a title search) which is issued by one of its underwriters. The title commitment reflects the title insurance policies to be issued, (i.e. owner’s title insurance policy and lender’s title insurance policy), the requirements to be met prior to closing, and the exceptions from coverage. Florida Sun Title carefully examines the Title Commitment on behalf of our clients. A copy of the title commitment will also be sent to the lender if the buyer is obtaining financing.
Step 7: Clearing Title Issues
Florida Sun Title will work with the seller to clear the requirements prior to closing. If the seller has an existing mortgage, it is necessary for us to work with the seller to obtain authorization to order a payoff statement of the mortgage balance. Sometimes real property tax payments are outstanding. We will obtain the proper amounts to pay any tax liens at closing. If there are title issues that cannot be cleared prior to closing, we notify the parties of the pending issues that may delay closing. Florida Sun Title works with all of the parties to try to clear any issues that may affect the closing.
Step 8: Preparation of Closing Statement and Closing Documents
If the buyer is paying cash and not obtaining financing, Florida Sun Title prepares the buyer’s and seller’s closing statements. If the buyer is obtaining financing, we provide the lender with a list of our fees and we calculate the proration of taxes and assessments. We then work with the buyer’s lender in balancing a Closing Disclosure, which the lender provides directly to the buyer. We will provide the seller with seller’s closing documents and we provide the buyer with our wire instructions to wire the funds on or before closing. Florida Sun Title does not accept cash, check (more than $1,000) or ACH transactions. ALWAYS CONFIRM THE WIRE INSTRUCTIONS WITH FLORIDA SUN TITLE – FRAUD ALERT!
Step 9: The Closing
This is the day everyone has been working towards. The buyer has wired their funds. The seller has packed and moved, or there is a written agreement between the parties about post occupancy. We will coordinate times for each party to sign their respective closing documents. At Florida Sun Title, we make it very convenient for you. Our Closer can come to your location to sign the documents, or we can locate a mobile notary if located outside Florida or far from our area. After we have obtained signatures from both parties and all closing funds are in our escrow account, we disburse the funds and record the Deed. We can be reached during regular business hours and provide copies of your documents at any time.
Immediately after closing, Florida Sun Title pays off the seller’s existing mortgages and promptly delivers checks to pay outstanding taxes and liens. The realtors and other parties and expenses are paid at this time. The complete mortgage file must be properly copied and organized and returned to the lender on the same date as the closing. The legal documents must be recorded in the public records in the county where the property is located. We electronically record our documents to ensure timely recording and minimum lag in the recording process. Once we have the recorded documents back from the recording office, we will order your title insurance policies. These are prepared directly by our underwriters. Once we have the final title policies issued by our underwriters, we mail the recorded deed, mortgage and owner’s title insurance policy and lender’s insurance policy. Our office is always here to answer your questions and provide you with copies of your documents. Please feel free to ask us any questions and know that you can contact us anytime with any issues that you have regarding your property – WE ARE HERE TO HELP AT ALL TIMES.