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Residential Real Estate Closings in Georgia

Residential Real Estate Closings in Georgia. Parties, Procedures & Forms. Pre-Closing Stage : The period of time prior to an upcoming closing and any activities that are performed by the attorney’s office in preparation for the closing.

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Residential Real Estate Closings in Georgia

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  1. Residential Real Estate Closings in Georgia Parties, Procedures & Forms

  2. Pre-Closing Stage:The period of time prior to an upcoming closing and any activities that are performed by the attorney’s office in preparation for the closing • Title Matters (order title search, review title report, request copy of seller’s title policy) • Loan Payoffs- any outstanding loans on the property • Schedule closing and keep in contact with parties • USA Patriot Act (search the SDN List)-Dangerous nationals not allowed to buy or sell real estate • Confirm hazard insurance has been purchased (get copy of declarations page)

  3. Pre-closing stage, cont. • Business entity considerations (formation and authority documents)-that it’s in good standing and the person signing has authority to sign. • Ascertain HOA and COA Dues • Organize documents from lender in the loan package • Closing secretary usually prepares closing documents (i.e., HUD, deed, 1099, affidavits)

  4. The Closing: Consummation of the Transaction • Performed by an attorney in Georgia • Follow lender closing instructions (even down to the color of ink used to sign documents) • Confirm identification of parties • Parties review and sign documents-require 2 forms of photo ID • Witness and notarize documents • At end of closing, disburse seller proceeds and broker commissions • Either issue title insurance policies now or in post-closing stage

  5. On the day of closing, buyer and seller should bring: Buyer and Seller should bring the following items to closing: • Original Power of Attorney, if applicable- POA for seller recorded with warranty deed and POA for buyer recorded with security deed • Two forms of ID • Invoices to be paid from closing • Verification of social security number • Any funds to be collected by the attorney • Seller – keys and garage door openers • Buyer – copy of hazard insurance policy with or w/o paid receipt • Seller – forwarding address & new phone number • Other documents required by the attorney or lender (from: http://www.closingsource.net/ (Buyer and Seller tabs)

  6. Typical Closing Documents Following is a list of the documents that a buyer signs where the buyer obtains a loan: • HUD-1 Settlement Statement: sets out all receipts and disbursements made by, on behalf of, or to the buyer and seller in the transaction. -everyone signs • Promissory Note: outlines the material terms of the loan including interest rate, term, maturity date, principal and interest payment amount, late penalty and prepayment penalty. • Security Deed & Waiver of Borrower’s Rights: recorded in the public records after the closing

  7. Typical Buyer Closing Docs, cont. • Agreement to Cooperate- both parties will be asked to sign • Affidavits: Where applicable, borrower executes sworn statements relating to: - owner-occupancy of the property - current employment and income - name variations or aliases- the non-existence of secondary financing - truth and accuracy of all information supplied to the lender

  8. More Typical Buyer Docs • Disclosures and Acknowledgements: Where applicable, borrower may sign the following disclosures and acknowledgements: - Acknowledgement that a default in payment of the loan could result in a foreclosure - Acknowledgement that the closing attorney/settlement agent represents the lender - Disclosure of the Annual Percentage Rate ("APR") as reflected on the TIL - Disclosure of projected escrow account activity for one year - Acknowledgement that property is or is not located within a flood zone - Acknowledgement of receipt and review of termite letter - Acknowledgement of receipt and review of survey - Disclosure of information relating to lender's history of transferring/selling loans

  9. More Typical Buyer Closing Docs • Loan Application - standard form which reflects the income, assets, debts and other pertinent information used to qualify borrower for the loan. • IRS form W-9 - verifies the borrower's social security number for the reporting of payment of interest to the IRS. • IRS forms 4506 and/or 8821 - authorizes the lender to obtain information from the IRS to verify information on application form. • First payment letter - shows total payment amount, date of first payment and information regarding where to remit payment.

  10. Typical Seller Closing Docs • HUD-1 Settlement Statement • Acknowledgement that the closing attorney/settlement agent represents the lender • IRS form 1099: reports the sale to the IRS • Deed conveys title to buyer; recorded in public records • Affidavits: Where applicable, seller executes sworn statements relating to: - name variations or aliases - knowledge of matters relating to the title - other matters specific to the particular transaction • Agreement to Cooperate

  11. Post-Closing Stage • Disbursement of remaining funds • Disbursement of documents - Return loan package to the lender - Send certain documents to be recorded in the county public records - Disburse recorded deed (to buyer) and security deed (to lender) • Correct errors made in execution of documents at the closing

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