GEORGIA REAL ESTATE - SECTION 22 UNIT 1 (THE CLOSING PROCESS IN GEORGIA)
QUESTIONS WITH COMPLETE SOLUTIONS!!
What Is a Closing? - (answer)Do you know what a closing is? And we're not talking about the kind where
the bartender turns on the lights at 2 a.m., and the evening's last few hangers-on vacate the pub.
We're talking about real estate closings, or settlements (and if you're being really official and using the
formal terminology, consummation). You may have some idea of what closings are, or maybe you've
even attended one yourself. Basically, they're the culmination of your efforts as a licensee. And—ka-
CHING!—commission time!
But do you know how and when a closing's scheduled? Who attends it? How to prepare your clients for
it?
Starting at the Start - (answer)Let's start at the beginning (we've been told that's a very good place to
start):
A seller, Karen Raymond, hired a real estate agent, Corrine Sinclair, to help her sell her home. Vince
Parker is in the market for a new home and has hired real estate agent, Soroush Azizi, to help him. Vince
views Karen's property and falls in love with it. Soroush helps Vince make an offer.
Because this is a story with a happy ending, Karen accepts Vince's offer. But it's not "happily ever after"
quite yet. Vince gets a home inspection to check for any potential defects. He also calls his insurance
agent to obtain a homeowners insurance binder.
After any additional requests have been fulfilled, Vince takes a final walk-through with his agent to
ensure the terms in the sales agreement have been met. Finally, we're ready to close, where Karen will
finally grant title to the property to Vince.
Passing Papers - (answer)Closings can be conducted in a couple of different ways. One method is where
everyone involved gathers at a pre-arranged meeting spot to sign and "pass the papers" at what is
known as the closing table. Another method is where the buyers and sellers (and all their related
support people) meet separately to complete their part of the closing.
No matter how the closing process is handled, someone has to be responsible for the closing. In some
states, a closing attorney manages the closing process. In others, a closing officer (usually from a title
company) performs the closing. In our story, Paula Rowe is the closing attorney. Paula started the
closing process the day she received the sales contract from the broker. She ordered a title search and
title commitment from a title insurance company. Before the closing, Paula also prepared the closing
documents and provided the necessary disclosures to the buyer.
Let's see who's here with Paula at today's closing. There's the buyer and seller, and the agents
representing them. The buyer and seller may also have an attorney present at the closing. The lender
may also have a representative at the closing.
,GEORGIA REAL ESTATE - SECTION 22 UNIT 1 (THE CLOSING PROCESS IN GEORGIA)
QUESTIONS WITH COMPLETE SOLUTIONS!!
As you can see, a closing can draw quite a crowd. Paula, as the closing attorney, makes sure everything
is in order. She presents each document (and there are a lot of them!) to the buyer and seller for
signatures and explains the purpose of each one. She also reviews the settlement sheet that (hopefully)
the agents have already reviewed with their clients.
Finally, we can close on the property! When the buyer and seller transfer the funds for title and deed to
the house, the transfer is recorded on the public record and the closing process is complete.
Contracts Consummated at Closing - (answer)You may think that only one contract is consummated at
closing, but in fact, several are. These include:
--The seller and buyer close on the sale agreement.
--The buyer and mortgage company close on the mortgage loan commitment. The buyer signs the note
and mortgage and the mortgage company delivers the funds.
--The buyer and the title company which is providing the title insurance, close on the title insurance
contract. The title company delivers the title insurance policy, and the new homeowner pays the
premium.
--The seller closes on the contract with the listing agent and pays the commission according to their
listing agreement.
--The listing agent and buying agent close on their cooperative brokerage agreement. The selling agent's
broker will pay the buyer agent commission to the buying agent's broker.
--The listing agent's broker and buying agent's broker close on their compensation agreement according
to the terms of their independent contractor agreement. The buyer's and seller's agents' brokerages
take their share of the commission and pay the agents they're split as contracted.
In short: there's a whole lotta contracting going on!
Closing Process Summary - (answer)The closing process varies from one state to another, and
sometimes even from one geographical area in a state to another. We can make some generalizations
about what happens throughout the process, though, no matter where it is.
The process begins when a seller and a buyer have come to an agreement on the terms of a sale.
They're said to be under contract. The contract is sent to the closing agent, and the closing process
begins.
, GEORGIA REAL ESTATE - SECTION 22 UNIT 1 (THE CLOSING PROCESS IN GEORGIA)
QUESTIONS WITH COMPLETE SOLUTIONS!!
Prior to Closing - (answer)Both the buyer and the seller have tasks to perform to prepare for closing. The
closing agent is responsible for several tasks, as well, which may be performed by the agent or by others
within the closing company.
Prior to Closing
Buyer - (answer)--Obtains binder for insurance coverage on home.
--Performs inspection.
--Negotiates inspection issues with seller.
--Finalizes loan application.
--Performs the final walk-through.
Prior to Closing
Seller - (answer)--Maintains property in good condition.
--Cooperates with the closing agent to provide necessary information about loan payoff, etc.
--Cooperates with the buyer to schedule inspections and appraisal.
--Performs any agreed-upon repairs noted in an inspection.
Prior to Closing
Closing attorney or agent - (answer)--Performs title search and orders title policy; presents title
commitment to the buyer. The title commitment is the title company's promise to provide a title
insurance policy at closing, provided that all conditions noted in the commitment have been met.
--Calculates the necessary proration of expenses.
--Obtains necessary information from all parties and prepares closing documents.
--Tells the buyer (and sometimes the seller) how much money to bring to closing (usually through the
delivery of a settlement statement that shows each party its respective financial calculations)
Before closing, the parties have assured themselves that the conditions/contingencies of the purchase
agreement have been met.
QUESTIONS WITH COMPLETE SOLUTIONS!!
What Is a Closing? - (answer)Do you know what a closing is? And we're not talking about the kind where
the bartender turns on the lights at 2 a.m., and the evening's last few hangers-on vacate the pub.
We're talking about real estate closings, or settlements (and if you're being really official and using the
formal terminology, consummation). You may have some idea of what closings are, or maybe you've
even attended one yourself. Basically, they're the culmination of your efforts as a licensee. And—ka-
CHING!—commission time!
But do you know how and when a closing's scheduled? Who attends it? How to prepare your clients for
it?
Starting at the Start - (answer)Let's start at the beginning (we've been told that's a very good place to
start):
A seller, Karen Raymond, hired a real estate agent, Corrine Sinclair, to help her sell her home. Vince
Parker is in the market for a new home and has hired real estate agent, Soroush Azizi, to help him. Vince
views Karen's property and falls in love with it. Soroush helps Vince make an offer.
Because this is a story with a happy ending, Karen accepts Vince's offer. But it's not "happily ever after"
quite yet. Vince gets a home inspection to check for any potential defects. He also calls his insurance
agent to obtain a homeowners insurance binder.
After any additional requests have been fulfilled, Vince takes a final walk-through with his agent to
ensure the terms in the sales agreement have been met. Finally, we're ready to close, where Karen will
finally grant title to the property to Vince.
Passing Papers - (answer)Closings can be conducted in a couple of different ways. One method is where
everyone involved gathers at a pre-arranged meeting spot to sign and "pass the papers" at what is
known as the closing table. Another method is where the buyers and sellers (and all their related
support people) meet separately to complete their part of the closing.
No matter how the closing process is handled, someone has to be responsible for the closing. In some
states, a closing attorney manages the closing process. In others, a closing officer (usually from a title
company) performs the closing. In our story, Paula Rowe is the closing attorney. Paula started the
closing process the day she received the sales contract from the broker. She ordered a title search and
title commitment from a title insurance company. Before the closing, Paula also prepared the closing
documents and provided the necessary disclosures to the buyer.
Let's see who's here with Paula at today's closing. There's the buyer and seller, and the agents
representing them. The buyer and seller may also have an attorney present at the closing. The lender
may also have a representative at the closing.
,GEORGIA REAL ESTATE - SECTION 22 UNIT 1 (THE CLOSING PROCESS IN GEORGIA)
QUESTIONS WITH COMPLETE SOLUTIONS!!
As you can see, a closing can draw quite a crowd. Paula, as the closing attorney, makes sure everything
is in order. She presents each document (and there are a lot of them!) to the buyer and seller for
signatures and explains the purpose of each one. She also reviews the settlement sheet that (hopefully)
the agents have already reviewed with their clients.
Finally, we can close on the property! When the buyer and seller transfer the funds for title and deed to
the house, the transfer is recorded on the public record and the closing process is complete.
Contracts Consummated at Closing - (answer)You may think that only one contract is consummated at
closing, but in fact, several are. These include:
--The seller and buyer close on the sale agreement.
--The buyer and mortgage company close on the mortgage loan commitment. The buyer signs the note
and mortgage and the mortgage company delivers the funds.
--The buyer and the title company which is providing the title insurance, close on the title insurance
contract. The title company delivers the title insurance policy, and the new homeowner pays the
premium.
--The seller closes on the contract with the listing agent and pays the commission according to their
listing agreement.
--The listing agent and buying agent close on their cooperative brokerage agreement. The selling agent's
broker will pay the buyer agent commission to the buying agent's broker.
--The listing agent's broker and buying agent's broker close on their compensation agreement according
to the terms of their independent contractor agreement. The buyer's and seller's agents' brokerages
take their share of the commission and pay the agents they're split as contracted.
In short: there's a whole lotta contracting going on!
Closing Process Summary - (answer)The closing process varies from one state to another, and
sometimes even from one geographical area in a state to another. We can make some generalizations
about what happens throughout the process, though, no matter where it is.
The process begins when a seller and a buyer have come to an agreement on the terms of a sale.
They're said to be under contract. The contract is sent to the closing agent, and the closing process
begins.
, GEORGIA REAL ESTATE - SECTION 22 UNIT 1 (THE CLOSING PROCESS IN GEORGIA)
QUESTIONS WITH COMPLETE SOLUTIONS!!
Prior to Closing - (answer)Both the buyer and the seller have tasks to perform to prepare for closing. The
closing agent is responsible for several tasks, as well, which may be performed by the agent or by others
within the closing company.
Prior to Closing
Buyer - (answer)--Obtains binder for insurance coverage on home.
--Performs inspection.
--Negotiates inspection issues with seller.
--Finalizes loan application.
--Performs the final walk-through.
Prior to Closing
Seller - (answer)--Maintains property in good condition.
--Cooperates with the closing agent to provide necessary information about loan payoff, etc.
--Cooperates with the buyer to schedule inspections and appraisal.
--Performs any agreed-upon repairs noted in an inspection.
Prior to Closing
Closing attorney or agent - (answer)--Performs title search and orders title policy; presents title
commitment to the buyer. The title commitment is the title company's promise to provide a title
insurance policy at closing, provided that all conditions noted in the commitment have been met.
--Calculates the necessary proration of expenses.
--Obtains necessary information from all parties and prepares closing documents.
--Tells the buyer (and sometimes the seller) how much money to bring to closing (usually through the
delivery of a settlement statement that shows each party its respective financial calculations)
Before closing, the parties have assured themselves that the conditions/contingencies of the purchase
agreement have been met.
