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Closing Basics: Securing the Real Estate Transaction

Buying or selling a home (or other piece of real property) usually involves the transfer of large sums of money. It is imperative the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. Thus, the escrow process was developed for the protection of the buyer, seller and lender. In many states, the escrow agent is a licensed agent within a title insurance company.
 
The closing agent receives detailed instructions from the lender, concerning what must be paid at the time of closing.

These payments could include: 
  1. Payoff of all existing mortgages
  2. Payoff of all existing judgments or liens
  3. Payment of the balance of the sales price, after mortgages are paid, to the former owner
  4. Real estate broker fees and commissions
  5. Mortgage fees and commissions
  6. Closing costs
  7. Title, homeowners and mortgage insurance
  8. Taxes
  9. Recording fees
 
What are the other duties of an escrow or closing agent?
In addition to handling the money for the transaction, an escrow or closing agent is often in charge of working with you and your real estate agent, the seller and his or her real estate agent, and your lender to assure all of the documentation needed for the closing package has been submitted and is complete.
 
The agent often oversees the closing process, explaining each of the documents to you and presenting them to you for your signature.
 
After all documents have been signed and the transaction is complete, the closing agent provides you with copies of those documents, and returns a completed mortgage package containing them to the lender.
 
In addition, the agent records all pertinent documents with the county recorder’s office, prepares a statement for all parties detailing the disbursement of funds, and requests the issuance of the title policy.