Keep Your Cool – Here’s What Really Happens at a Virginia real estate closing

Details matter, especially when it comes to the all-important  Closing Disclosure.

After all of the components of the home buying process — negotiations, appraisals, inspections, and insurance — it’s very exciting to (finally) get to closing. But do you know what really happens during this final appointment? Closing on a home can be nerve-racking simply because many first-time buyers don’t  know what to expect or what to bring along.

What does a closing company do anyway? read below and we will take you through steps from start to finish.

1. Verify and Search Title: We determine and verify, pursuant to the requirements of the contract, whether the title to be conveyed to you is insurable by causing the land records to be searched and placing an order for title insurance with First American Title Insurance Corporation in accord with its guidelines, standards and practices. Your transaction will not close unless title to your property is insurable at standard rates. We will be happy to provide you with a First American brochure describing and explaining title
   insurance.

2. Order Survey: (if requested) In most transactions, especially if you purchase an enhanced title insurance policy (which has become the de facto standard for us and others), a survey of your property is not required. We do, however, strongly recommend that you elect to have a survey performed since only a survey can discover encroachments, defects in size and quantity, etc. The cost for a typical subdivision lot survey is $450. Please let us know immediately if you would like for us to order a survey for you. See the

3. Manage the Closing Process: We work closely with your lender, your real estate agent and the seller’s representatives in order to ensure that your team is working together to get you to the closing table. As part of managing the closing, we are here to answer any of your questions and help you through the process.

4. Comply With Lender Instructions: Your lender will have lengthy requirements that need to be met before we have their permission (and their money) to close. They will issue these instructions and requirements directly to us and we will ensure they are met. Among others, we will provide them with a title insurance binder (a promise to insure the property), a copy of the deed, an abstract of the legal description, a copy of your hazard insurance policy, the survey, if required or obtained, an insured closing
   letter and other requirements and documents.

5. Assists With Preparation of the Closing Disclosure: Previously known as the HUD-1, the new Closing Disclosure is the document that summarizes and states the financial terms of the transaction and the loan. Your lender is responsible for preparing this form and providing it to you three days before closing. The final Closing Disclosure will tell us how much money you need to bring to
   closing, and those funds must be certified (typically a cashier’s check).
   Your closing funds must be certified funds (cashier’s check, wire, money orders, certified check). Often the Closing Disclosure is not finalized until shortly before closing because some information comes from third-parties at the last minute, but we will complete it and give you your final number as soon as we are able.

6. Complete The Closing Documents: A final closing package typically consists of more than a hundred pages of documents to be reviewed and signed! Lytle Title completes many of these documents, your lender will prepare most of them and the seller’s representatives will prepare some of them. Lytle Title is the first, and still the only, settlement agent to offer Documents on Disk,
   where we scan to pdf your entire closing package and provide those hundred pages to you in electronic
   form – perpetual, convenient and readily accessible by you.

7. Schedule and Conduct Closing: Coordinating with you, your real estate agent, your lender and the seller, we will schedule your closing date and time. In this area, the sellers do not come to closing. Obviously, the closing date should be the date on your contract, but the time will be determined according to everyone’s schedule – afternoon is usually best. We close transactions during normal
   working hours, but if for some reason you need an after-hours closing, we can do that for a fee of $75.00. You should allocate approximately one hour for your closing.

8. Update Title, Record & Disburse: Once you have signed the closing documents, we have the seller’s documents, we are fully funded with your money and the lender’s money, we will update title, record your deed and the lender’s deed of trust, and then disburse the money to everyone entitled to money, make the payoffs, etc. As noted previously, the title search will be done early in the
   process to ensure there are no problems and that title can be insured. After closing, we will update that title search from the earlier moment up until the time we hand the clerk the deed to your home. This ensures no new title problems have arisen, like judgments, tax liens, foreclosures, etc. We update title and record the first business day after closing assuming we are funded.

9. Post-Closing: After we receive your recorded deed back from the Clerk’s Office and your final title policy from the underwriter, we will forward them to you. You should keep them in a safe place. In addition, we follow through to deliver the lender’s documents back to the lender.

What Can We Do To Help Make Our Closing Go Smoothly?

Great first question! Here are the top things you can do for us to help make your closing a great one:

• Make sure we have good contact information for you.
• Send us a copy of your Loan Estimate and Closing Disclosure (if permitted by your lender)
• Decide whether you want a survey and tell us if you do (see the Do I Need A Survey FAQ).
• Immediately tell us if you intend to close by power of attorney and send a copy to us and the lender
for pre-closing review and approval (and bring the original to closing for recordation, we must have
the original).
• Immediately select a homeowner’s insurance company and agent, select your desired coverage, and
provide us with the agents’ name and contact information – direct them to provide us with what we
need (they know).
• Do what your loan officer and lender asks of you as quickly as possible. Much of what we do
depends on your lender releasing their package and figures to us, and if they are waiting on you then
we are all waiting on you.
• Keep in communication with your real estate agent and do what he or she asks of you.
• Be flexible with your schedule in the day or so leading up to closing: schedule your walk-through
and repair inspections at least the day before the closing day, and schedule the moving company for
at least the day after closing. Keep the actual moving date flexible until you know for certain the day
you will close (dates sometimes change for a number of reasons).

When Do We Schedule the Actual Closing Time and How?

We assume the closing date specified in the contract is the date closing will occur and process your closing with that date in mind. We will schedule the actual time with you and your agent – we generally suggest that be done approximately one week in advance, but we can go ahead and schedule a time as soon as we receive the contract. Most clients prefer to have their agent coordinate the actual time with us, but feel free to contact your closer by phone or email to schedule the time.

What Happens at the Closing Table?

Our closer will sit down with you and go through the closing package document by document. You will give us your check (certified or cashier’s). We will provide you with hard copies of the more important documents and electronic copies of all of the documents with our proprietary Documents on a CD.

How Long Will Closing Take?

The closing takes anywhere from 15 minutes to 45 minutes depending on the size of your closing
package, whether you are getting a second mortgage and the amount of time you desire to spend
reviewing the documents. We allocate approximately one hour.

What Do I Need to Bring to Closing?

Everyone who needs to sign (both husband and wife, for example), your certified funds, and photo identification. That’s it.

Can We Bring Our Children to Closing?

Of course. However, a house closing involves reviewing and signing many documents, asking and answering questions, etc. so many parents make arrangements not to bring their children so they can focus on the task at hand and not be distracted by their children (who rightly find closings pretty boring indeed), but this is up to you.

Who Attends Closing?

You, your agent, and sometimes your loan officer. Occasionally the seller’s agent will attend briefly. In this area, sellers do not attend the buyers’ closing and vice versa.

Will I Be Able to Review All of the Documents at Closing?

Absolutely. We will go through each document and point out the essential terms to ensure you understand them and they meet the terms of the contract and your loan. It is not practical to read each and every document at the closing table (there are more than a hundred pages in the typical closing package), but if you would like to do so just let us know and we will arrange to get the package to you before the actual closing so you can review it in more detail.

What Documents Do I Sign at Closing?

You will sign a lot of documents at closing! The most important documents in any real estate transaction are the Closing Disclosure, the deed, the note (where you agree to pay back the bank’s money), the deed of trust (where you agree the bank can foreclose if you don’t pay it back), the TruthIn-Lending Statement, and the inspection reports required to be provided at closing, e.g. the termite
inspection. There are many, many other documents required by your lender and, depending on the loan
type, the federal government.

When Will I Know How Much Money I Need for Closing?

As soon as your lender has finalized the Closing Disclosure (sometimes a lender asks us to finalize it after their three-day initial Closing Disclosure is provided). This tells us, and you, exactly how much money you need to bring to closing. Closing funds must be certified funds, e.g. cashier’s check (the most common, obtained from your bank), certified check, money order, or wire. Unfortunately, it is not
uncommon for the final number not to be known until the day before or day of closing. Please don’t stress about that – if it looks like we won’t know the final, precise, number until near closing, which won’t give you enough time to go to the bank, then get a cashier’s check for the amount shown on your three-day Closing Disclosure.

Can I Write a Personal Check at Closing for the Money?

No. Virginia law and your contract requires that closing funds must be certified funds, e.g. cashier’s check (the most common, obtained from your bank), certified check, money order, or wire. Unfortunately, it is not uncommon for the final number not to be known until the day before or day of closing. Please don’t stress about that – if it looks like we won’t know the final, precise, number until near closing, which won’t give you enough time to go to the bank, then get a check for the amount shown on your lender’s
three-day Closing Disclosure. We will refund any excess and if there is a minor shortage, we can take a personal check for the difference.

When Do I Get The Keys?

In this area, it is customary for the keys to be delivered to you right after closing, usually by your agent. You will not be able to get the keys and gain possession of the house until you have signed everything, paid your money in certified funds, and your lender has funded the transaction. Is It Okay to Schedule Movers for the Day of Closing? We would not recommend that you do so for a couple of reasons: first, it is not uncommon for the closing to be delayed beyond the contract and scheduled date, which leaves you having to deal with your movers; and second, the actual closing day is fairly hectic for most people – don’t try to have too much scheduled
on the same day. In fact, we would suggest you have your walk-through the day before the closing and have movers scheduled for one or two days after closing.

Do I Have a Right To Cancel the Deal After Closing?

No. There is no right to rescind or cancel the deal. Contact a lawyer (obviously we recommend Brian D. Lytle, the company namesake) if you need to discuss rights, duties and obligations under the contract since Lytle Title cannot provide legal advice.

Can I Close After Normal Business Hours?

Our office hours are from 8:30 to 4:30 Monday through Friday. The purchase of a house is one of the most significant financial events in the lives of most people and deserves an hour or so from work to accomplish it. We strongly encourage our clients to close during normal hours – not only is it better from a practical standpoint since we (and you and your agent) may need to communicate with others, but our staff have families too. Nonetheless, sometimes after-hours closings are a necessity and we will perform
them, schedules permitting, for a fee of $75 (compensating the staff person who stays late or comes back to the office).

How Will I Know If Everything is Progressing Normally?

You won’t hear from us! Generally, we simply make our initial contacts and begin processing your closing and contact you on an as-needed basis as we coordinate most of the closing with your agent and lender. But you are welcome to contact us at any time by email or phone.

Do I Need a Survey?

Whether you must have a survey depends on whether your lender requires one. Typically lenders require that they be insured against matters that would be disclosed by a survey, but new, enhanced title insurance such as First American’s Eagle Policy (which is what Lytle Title issues as a matter of course) will insure against most survey problems even though there is no survey. As a result you will not have to have a survey to close. Lytle Title still recommends that you have your property surveyed, however. The cost is reasonable – approximately $450 for a normal residential lot – and there is no substitute for having a surveyor check and mark the boundaries, verify lot size, check for setback line violations, locate easements, determine whether there are any encroachments (fence, shed, pool, driveway, etc.),etc. But we will not order a survey unless you tell us you want one.

What is Title Insurance?

Title insurance an insurance policy issued by a specialized insurance company guaranteeing that the title to a parcel of real property is clear and properly in the name of the title owner and that the owner has the right to deed the property (convey or sell) to another. Should a problem later arise with the title (such as an inaccurate description), the insurance company will pay the damages to the new owner or secured lender or take steps to correct the problem. Your lender will require that you obtain and pay for a policy to protect
the lender. A policy to protect you is optional (see below).

Do I Need Owner’s Title Insurance?

We believe so and so do nearly all real estate professionals. As noted previously, you must obtain and pay for a lender’s title insurance policy. But that lender’s policy provides you with no protection whatsoever. And title problems frequently arise: from unreleased deeds of trust, incorrect legal descriptions, mistakes, omitted spouses and heirs, but to name a few that we see quite frequently. The premium is a one-time fee paid at closing that protects your interest for as long as you own the property, and defends you against
claims long after you sell it. If an owner’s title insurance policy is obtained at the same time as the lender’s policy then the rates are less expensive. We always explain that the premium is not much to insure the most valuable investment most people make in their lifetime.

Common Mistakes to Avoid

• Try to avoid closing on the last day of the month.
• Don’t skip the final walk-thru.
• Don’t make any big financial purchases in between contract and closing.
• Don’t skim the closing documents.

Armed with the information above, Williamsburg home buyers should feel comfortable going into their closing. Once the closing is over, you should receive keys and you’re officially the owner of your new home!

More Questions? We have the answers so just call or email us!

Psst, I’m a real estate agent.

This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads area and his expertise helping buyers and sellers in the local real estate market.

If you are a homeowner searching for someone innovative to sell your home I would love to share my thoughts on marketing. You can read some of the stories I have written about the homes I have sold here.

Additionally, I have helped hundreds of folks find their dream home/ community and would love to help you find yours in Williamsburg, Yorktown, New Kent, VA Beach, Chesapeake, Suffolk, Isle of Wight Poquoson as well as Richmond.

You can reach me by phone at 757-254-8136 or email  [email protected]

I look forward to serving your real estate needs!

Best,