What is "the closing"????

Somebody has a home to sell. Somebody wants to buy it. The stage is set!

The usual process goes like this: buyer writes a contract offer to purchase, the offer is negotiated, eventually the buyer and seller agree on all terms and conditions (or not!), perhaps some "earnest money" is deposited on account by the buyer, home inspection happens, attorneys for both sides hammer out the fine points, and .... Ta Da!!... this thing called "the closing" appears on everyone's calendar. What is it? Who attends? What happens? When?

In truth, quite a bit happens at the closing, but in keeping with the spirit of good blogging, I'll keep this brief.

The buyer and the seller (or their legal representatives) sit down with a title company officer ("the closer") to finalize the transfer of the property. Mortgage documents are signed and faxed to the lender, any monies that are pertinent to the transaction are accounted for on the "HUD-1" (otherwise known as the RESPA form), any past-due accounts on the property are verified as satisfied (property taxes, liens, special assessments, condo assessments, etc.), the "closer" asserts all the documents are correct and the money columns balance for the transaction, approves the deal, and suddenly thousands, maybe hundreds of thousands of dollars, or a few million dollars (houses can be costly in Chicagoland) suddenly fly around the closing table. The mortgage company gives the buyer his/her loan dollars, the buyer gives the seller his/her funds to purchase the property, the attorneys get their fee, the Realtors for both sides take home commission checks to their brokerage, the title company collects its fee,...

If any of these pieces do not fall property into place, the closing is blocked from its normal conclusion. And any seasoned real estate agent can tell you, that is one stressful situation. Every person involved in the transaction has a lot riding on the closing, not the least of which is the property transfer. If the deal does not close, somebody might not have a place to sleep that night (buyer or seller), moving company plans are blown off track, the subsequent closing for the seller might be delayed because they seller does not have the funds to close on their new property they planned to close on that same day. You get the picture.

Extreme preparation and cooperation is key in making a closing happen according to plan. If you have never purchased a property before, take heed, follow your lender's instructions, your attorney's instructions, and your agent's instructions. Or be prepared for a very troubling episode.