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REE3433 Exam 3 (UCF Fencik) (1)
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REE3433 Exam 3 (UCF Fencik) (1)
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REE3433 Exam 3 (UCF Fencik)Real Estate Closing - ANS-The event at which the real estate contract is finally
performed.
Consummation of the sale of real estate.
Parties gather to fulfill promises made in Purchase
Agreement.
During Closing (Buyer & Seller) - ANS-Buyer: Pays the purchase price.
Seller: Conveys the title promised in the contract
The Real Estate Closings, more info - ANS-Ensure concurrent performance of both
parties.
■ Done under the supervision of a designated referee
❑ Title Company
❑ Closing Attorney
❑ Escrow Agent
In most instances, two closings occur at once:
(1) Real estate contract is closed
❑ closing of sale of property
AND
(2) Mortgage transaction is closed
❑ disbursal of mortgage funds by lender
Two Methods of Real Estate Closings - ANS-New York Style: Parties exchange
documents at a closing table. Advantage is that last-minute problems can be resolved
because everyone is present
Western Style or California/Escrow Closing: parties deliver executed documents and
deliver to an escrow agent via overnight mail/escrows. Advantage is that all documents
prepared and examined by escrow agent in advance, thereby, all but eliminating
last-minute problems.
Escrow agent oversees:
❑ The buyer-seller purchase and sale
❑ The seller's prepayment of the existing loan
❑ The documentation and funding of the buyer's new loan
,Escrow Agents (Functions & Duties) - ANS-1. Obtain information from the parties or
from deeds, title policies, preliminary reports or
purchase-and-sale agreements
2. Order preliminary title report
10. Order title policy
11. Arrange for recordation of documents
12. Disburse and deliver documents
Exchange of Docs at Closing (order of events) - ANS-1. Buyer signs Note and
Mortgage and receives
check for amount of loan.
2. Buyer pays Seller the
purchase price -- generally
Buyer provides his own
certified check plus
borrowed money.
3. Seller pays off
mortgage and Seller
pays real estate
commission based on
gross sales price and to
reimburse broker for any
expenses made on
behalf of
Seller.
4. Seller provides Buyer
with a deed, title
insurance policy, receipt
for payment, copy of
Seller's Mortgage
discharge, bill of sale for
personal property being
sold, receipt for
payment of last utility
bills and taxes.
5. Mortgagee provides
, Buyer with a copy of
Note and Mortgage and
other mortgage closing
documents.
6. Seller receives
Mortgage, Note and
copy of discharge back
from Seller's Mortgagee
Lender's Requirements at Closing - ANS-Protecting the Lender's Interests - To protect
its security interest in property -- to
make sure Borrower is getting good, marketable title and that tax and insurance
payments are maintained, Lender requires:
1. Title insurance policy
2. Fire and hazard insurance policy
3. May require additional documents such as a survey or inspection report
4. Estimate of reserve for escrow, tax and insurance payments
Important Miscellaneous Items at Closing - ANS-1. Make sure title reports are brought
up to date of closing to ensure no last minute
liens.
2. Immediately record documents to avoid potential priority problems.
3. Borrower should always get keys of home.
What is a Deed? - ANS-A deed is: "A written instrument, which has been signed and
delivered, by which one individual, the
grantor, conveys title to real property to another individual, the grantee; a conveyance of
land,
tenements, or hereditaments, from one individual to another."
General Warranty Deed - ANS-An instrument that transfers real property from one
person to another and in which the grantor
promises that title is good and clear of any claims.
In Florida, a general warranty deed is generally created by resort to the form prescribed
by Florida
statutes.
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