In South Carolina, conducting a real estate closing is considered the practice of law and an attorney licensed in South Carolina is required to supervise and review the title search of the property, conduct the closing, supervise the recording of the legal documents and also supervise the disbursement of the funds from the closing.
A closing can be intimidating, but we find that educating the client on what to expect and how the process will unfold helps make the entire procedure much more manageable. With that in mind, here is a look into the process that we follow for residential real estate closings.
First, Scheduling the Closing
Typically the realtor for the buyer will send a copy of the contract along with a request to schedule the closing on a date and time as provided for in the contract of sale. At this point, our office will contact everyone to confirm the date and time and to confirm that they will be the contact person for the closing.
Second, Gathering Information for the Closing
Our office will then contact the buyer, seller and their realtors to gather the information necessary for the closing. From the buyer this information will include the buyer contact (telephone and e-mail), lender name and contact, loan information and name of insurance agent/agency for homeowner’s insurance. From the seller this information will include seller contact (telephone and e-mail), seller social security number or TIN (required to be gathered by state and federal law), loan payoff information (loan servicer name, telephone number and loan number for each mortgage loan, including home equity line of credit loans), forwarding address, homeowner’s association dues information for the proration of HOA dues at closing and for obtaining a dues statement from the HOA for closing, which is necessary to confirm that all HOA dues are current and to ascertain if there are any HOA transfer fees or other HOA fees due at closing.
Behind the Scenes
Leading up to the closing, our attorneys and their team will be coordinating and working with the realtors for the buyer and seller, and also the lender for the buyer, to make sure all is in order for closing and to provide to the lender the items it requires for closing, This includes title information for the property, fees and costs for the closing disclosure form or settlement statements, and other items the lender requires for closing.
Title Search and New Survey of the Property
As a part of the closing process, our attorneys will order a title search of the property, which is an examination of the public records for typically a forty (40) year search period to ascertain if the title to the property is marketable and may be conveyed to the buyer in accordance with the contract of sale, free and clear of all liens except those to be paid and satisfied at closing. If the closing attorney determines that there is a problem or issue with the title, the parties will be notified of the issue along with the recommendation of the closing attorney. Our attorneys will also review the last recorded survey of record of the property and the buyer will then be contacted to make a decision on ordering a new survey of the property, which is optional but generally recommended. The cost of a new survey for a neighborhood residential property is typically $425.00 to $450.00 (may be higher in some circumstances). If the buyer elects to obtain a new survey, our team will order the survey for review by the buyer prior to closing.
The Closing Disclosure Form or Settlement Statement
On most new home loans, the lender is required to provide to the buyer a Closing Disclosure Form no less than three (3) days prior to closing. This form replaces the HUD settlement statement on these loans, and outlines all of the buyer costs, fees, payments and figures for closing. A separate Closing Disclosure Form is provided to the seller by our offices. On these closings the closing attorney also typically provides a master settlement statement for the closing, which outlines all buyer and seller figures for closing. Upon receipt of these forms the buyer, seller and realtors should carefully review and immediately contact our offices if there are any questions, corrections or other additions or changes to the closing disclosure form or settlement statement.
Funds Due at Closing
All funds due at closing are required to be “good funds” immediately disbursable from the attorney trust account at or in conjunction with closing. What does this mean to the buyer or seller? It means that if funds are due they must be delivered by wire transfer or by certified bank check (with certain exceptions for small sums due at closing). Wired funds are “good funds” upon receipt but if payment is by certified check it may be necessary for the check to be delivered and deposited at least one day prior to closing for a certified check from a bank with local branches. Our office may not be able to accept certified checks from out of state banks, so if funds are due from you at closing you should contact our offices to arrange for “good funds” to be delivered at closing in accordance with your obligation under the contract of sale.
Review of the Documents Prior to Closing
We should receive your loan documents no later than the day preceding closing for home purchase closings. In some rare circumstances, we do not receive the documents until the day of closing. We can send your loan documents to you to review via e-mail prior to closing (provided we receive them in a timely manner from your lender). If you wish to review your loan documents prior to closing please let us know and also tell your loan officer that you wish to review the loan documents prior to closing. Please also ask that they be sent as soon as possible to our office. If you are the seller at closing you will sign the Title to Real Estate (deed) conveying the property, and several affidavits and other closing forms, which typically include the S.C. Withholding Tax Affidavit, the IRS non-foreign affidavit, one or more title affidavits and an IRS 1099 form or exemption from reporting on sale of primary residence form.
At the Closing
Once you arrive, you will first be asked to provide your driver’s license or other government issued picture identification card, as we are required to verify the identity of buyer and seller. The closing attorney will then typically review the closing figures and amounts set for the on the closing disclosure forms and closing settlement statement. The buyer will then review and sign the loan documents and other buyer forms, and the seller will then sign the seller closing documents. The lender may require that it review and approve certain “funding documents” at closing prior to the attorney disbursing funds or recording documents. If this is required then these documents will be scanned and e-mailed at closing, and the attorney will be required to wait until the lender gives “funding authorization” prior to disbursing funds. Once this authorization is received the attorney may disburse funds and proceed to record the documents. If you are a seller you typically will receive your check at this time, unless you elect to have us wire to your bank account the proceeds of sale. The realtors also typically receive their checks at closing also, and keys and any other items are exchanged between buyer and seller. The closing is then concluded and our office will then attend to the recording of the legal documents of public record, the disbursement of loan payoff amounts and other funds from the closing, and the delivery of the loan documents to the lender. The closing typically takes approximately one hour, depending on the circumstances.
After Closing
If you are the buyer, after closing we will forward to you your recorded deed (Title to Real Estate) together with your policy of title insurance. Upon receipt of these items or otherwise promptly after closing, you will need to apply with the county of your residence for the special residential tax rate for primary residences (unless the property is not your primary residence). If you are the seller you will need to cancel your homeowner’s insurance for the property, and approximately five (5) business days after closing we suggest that you contact your prior loan servicers to confirm receipt and crediting of your loan payoffs. Most lenders refund balances of loan escrow accounts after closing, so if you are due a loan escrow account refund then you may typically expect to receive it within twenty (20) to thirty (30) days after closing.
Work With the Experienced Real Estate Attorneys and Staff of McKinney-Sullivan, LLC
Our attorneys and staff strive to provide our clients with friendly, attentive and personalized service in a professional manner for an affordable fee. We are here to answer your questions and to treat you in the same manner we would expect to be treated were we the home buyer or home seller. We appreciate the opportunity to be of service and look forward to working with you on your homebuying, selling or refinancing experience!! Call us today at 864.242.6724 or contact us now online!