Contact Unity Title
15100 Washington St, #201
Haymarket, VA 20169
Tel: (703) 257-1884
Fax: (571) 248-4436
9214 Center Street, 3rd Floor
Manassas, VA 20110
Providing real estate settlement services and title insurance throughout Maryland and Northern Virginia, including Gainesville, Haymarket, Woodbridge, Manassas, Fairfax and Warrenton.
Settlement Services for Buyers
You have the contract...what happens now?
Prior to Closing
Once all parties, buyers and sellers, have executed the purchase contract the next steps can be confusing. Every transaction is different, however, there are standard procedures that generally occur before all closing transactions.
This step towards settlement is a request for a title search on the property. An examination of title occurs in order to generate a title insurance commitment or binder. The title insurance commitment is generally a requirement by your lender which must be submitted along with an insured closing letter by the title company prior to settlement. If there are any title issues, this allows time them to be handled properly before settlement.
An appraisal is required by lenders to ensure the value being invested for the home is sufficient for financial security purposes. The appraisal can cause a delay in closing if not completed.
A homeowner’s or hazard insurance policy needs to be obtained prior to settlement. The first year premium is due either prior to closing or will be collected at closing. Proof of your new insurance policy should be brought with you to closing.
A survey of the property is a drawing which shows the property’s boundaries as well as the house’s location on the property. The survey typically includes any easements of record or well and septic systems (if applicable), as well as encroachments which could potentially cause problems. The survey usually is a requirement by the lender financing the transaction; however, if it is not, the buyer may want to order one any way as a means of protection.
A home inspection may be conducted to determine the physical condition of the structure and appliances. It is the buyer’s decision to order the inspection; it is not a typical requirement by the lender.
All requirements for financing are completed and the settlement date is here. What should you expect at the closing table?
What is the Closing?
The real estate closing or settlement is the scheduled time which the property sale occurs during which the seller conveys the property to the buyer through the execution of a deed, a buyer executed loan package and a settlement statement. Both parties sign the HUD-1 settlement statement and the buyer purchases the home. The deed is signed by the seller and conveys the property to the buyer. The loan package provides the terms for repayment and secures the loan against the property through the deed of trust. A settlement statement is generated which provides all fees and credits which need to be collected for or paid out at settlement as well as the loan amount qualified for.
The settlement statement is a major source of confusion for new homebuyers. It is also referred to as the HUD-1. The settlement statement is generated to provide a financial itemization of all numbers being processed for all parties involved: seller, buyer, lender, real estate agents, and other parties providing services. The statement will show both the buyer’s bottom line and the seller’s proceeds or profit from sale of property.
A major component for the generation of the settlement statement is the lender’s instructions. The lender’s instructions provide the title company the backbone for the HUD-1, including the loan amount, lender’s fees and special contingencies for closing. An accurate HUD-1 cannot be created until the lender’s instructions are received. The HUD-1 must be approved by the lender prior to settlement in order to assure accuracy in the collection of fees. Delays can occur if the statement is not reviewed and approved by all parties prior to settlement.
Recordation and Disbursement
The guidelines for recordation and disbursement of proceeds differ from state to state. In the state of Virginia, all monies are to be received at or prior to closing. Documents are recorded and funds are disbursed within 48 business hours of closing. If there are any delays involved, the parties need to be notified of the delay.
In Maryland, all funds must be received at or prior of settlement and disbursement of all proceeds can occur immediately following the closing.
The recordation process involves sending both the deed and the deed of trust to the county courthouse to be processed and "recorded" in the land records. This places the public on notice that the property has been conveyed.
Disbursement includes generating payments to all necessary payees as reflected on the settlement statement.
What is Title Insurance?