Mock Closing

Mock Closing

© 2023 Independence Title Education

MOCK CLOSING What to Expect Before the Big Show!

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Act I – Things to know before the show.

Act II – Closing Day- Show TIME! Act III – Curtain Call – What Happens Next?

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1

ACT I

Overview of Title

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Title companies do more than closings!

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2

What Is Title Insurance?

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A title insurance policy protects the future of your real estate investments.

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3

We start by researching the full history of property.

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We clear up any known issues and then assume certain kinds of additional risk on behalf of the owners.

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4

Through the years, a property may change hands many times due to sale, inheritance, marriage, divorce, or foreclosure.

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Each transfer is an opportunity for an error in title to arise, which could affect whether the buyers have full ownership of the property. That’s why you need us!

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5

Examples of Claims Against an Owner’s Title Policy

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Years prior to selling, a property owner adds a detached garage but does not get permits or notify the county tax office.

Three years after the sale of the property, the county tax office sends the New Owner a bill for back taxes on the improved property, going back to the date the Seller built the garage.

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6

If a homeowner dies without a will, state law allows two people outside the family (“disinterested parties”) to submit an Heirship Affidavit establishing who the heirs to the property should be.

Obviously, there could be relationships unknown to them, and heirs that were not accounted for can appear years later and claim some of the proceeds of the sale from the new owner or claim an ongoing interest in the property.

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It’s possible that documents in the chain of title may be forged, especially a release of lien (claiming a debt was paid), fraudulent “conveyances” (deeds that transfer title to the property), and powers of attorney.

One Common Scam: a fraudster identifies a property not occupied by the owner, files a fake deed transferring title into their own name, and “sells” the home to an unsuspecting buyer.

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7

Ask Your Rep for a Rate Sheet

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Underwriting, what does that mean to me?

We live here, work here, invest here.

What makes Independence Title unique?

Experience the freedom of Independence!

Independence Title Company can issue title policies on almost every major underwriter in the United States to include Alamo, Chicago, Fidelity, First American, National Investors, Old Republic, Stewart Title and Title Resources Guaranty Company. This gives us the unique ability to “SHOP” for favorable underwriting guidelines to best handle complicated title issues, as opposed to being locked into the limitations of just one underwriter.

Multiple Underwriters

National Investors Title Insurance Innovative by Instinct

Independence Title LEARN MORE

IndependenceTitle.com

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8

Title Terms Closing The conclusion of the sales transaction when the seller transfers title to the buyer in exchange for consideration.

In Texas, these proceedings are usually held at a Title Company.

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Title Terms Closing Cost Costs the buyer must pay at the time of the closing in addition to the down payment, which may include points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, appraisals, prepayments for property taxes, deed recording fee, and homeowners' insurance.

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9

Title Terms Notary The main responsibility of a Notary Public is to verify that an impartial party (the Notary Public) has properly informed the signer of a document about its significance and that the signer has confirmed their identity, signature, and reasons for signing the document is authentic.

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Title Terms Power of Attorney A written authorization by a person to another person to act for them on their behalf. Also known as POA.

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10

Meet The Cast

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The Listing Agent • Verify all terms and conditions of the contract have been satisfied before closing.

• Work with the seller to ensure all required forms have been completed and provided to the escrow officer.

• Make sure all repairs have been completed and the property is ready for final walk through.

• The listing agent is not required to attend closing, but sometimes they do.

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11

The Selling Agent • Verify all terms and conditions of the contract have been satisfied before closing.

• Carefully review the settlement statement for possible errors.

• Work with the buyer to ensure all required forms have been completed and provided to the escrow officer.

• Take the buyer on a final walkthrough of the property the day before closing to ensure repairs have been made and no damage has occurred since the contract was signed.

• The selling agent is not required to attend closing but most often does.

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The Lender • A good lender is key to closing on time!

• Responsiveness and good communication is of upmost importance.

• Invite the lender to attend the closing.

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12

Escrow Officer • An unbiased third party who leads a team working to ensure the transaction is carried out correctly for both the buyer and the seller.

• Manage the closing documents and money (earnest money and option fee).

• Make sure all documents are filled out correctly.

• Facilitate the closing process and ensure that the property is free of all liens, debts, and the parties to the transaction are who they say they are.

• Responsible for reviewing all closing documents and explaining to each party the documents being signed at the closing table.

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Escrow Assistant • The role of an escrow assistant is to assist the Escrow Officer.

• Chances are good you will speak to one of the escrow assistants through the transaction.

• They might call to remind you of documents needed, or to check on the progress of one that has been requested.

• They will often call to setup the closing day/time with you.

• They do A LOT and are a very important member of the team.

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13

Independence Title Business Development Representative • Business Partner • Problem Solver • Connection to Escrow Team • Advocate • Support System

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Before Closing, Let Title Know…

Of any changes made to the contract during option.

If the transaction linked to another closing.

If a Power of Attorney going to be needed.

If all parties will be present at closing.

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14

A Closing Confirmation Email is Sent to the Sellers

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A Closing Confirmation Email is Sent to the Buyers

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15

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16

ACT II

Closing Day- Show Time!

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Greeting and Seating • Closer will welcome everyone.

Seating Chart Example

• Plan where parties should sit.

signer

signer

• Reserve the seating next to the Closer for your clients.

closer

• Ask Closer if they have a preference. signer

signer

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17

Closer will ask for ID Must be valid (not expired)

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Understanding Closing Statements

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18

Loan Closing Statements

ALTA Settlement Statement

Seller’s Closing Disclosure or CD

Buyer’s Closing Disclosure or CD

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Cash Closing Statement

HUD Statement for Cash Transactions

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19

ALTA Statement in Detail

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calculate straight

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20

ALTA Pg. 1

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ALTA Pg. 1

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21

ALTA Pg. 2

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ALTA Pg. 2

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22

x/x/xx

x/x/xx

x/x/xx

ALTA Pg. 3

x/x/xx

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HUD Statement in Detail

Cash Only Presented by the Education Team at Independence Title. TREC Approved Continuing Education Provider License# 403.

23

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24

HUD Pg.1

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HUD Pg.1

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25

HUD Pg.1

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HUD Pg.2

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26

HUD Pg.2

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HUD Pg.2

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27

x/x/xx

HUD Pg.2

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Your Closing Statement Checklist

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28

Buyer Documents

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Other Documents

Important Documents

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29

Deed of Trust • • • • • • •

15-20 pages Buyer initials each page Signs and notarizes last page Mortgage document Recorded after closing Creates a lien on the property Lender can use to foreclose

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Loan Number

Note • • • • • • •

3-5 pages Buyer initials each page Must be Notarized Promise to pay Contains loan terms Not recorded Goes back to lender

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30

Other Loan Documents MORTGAGE INSURANCE DISCLOSURE

PATRIOT ACT DISCLOSURE

AKA STATEMENT

PAYMENT AND AMORTIZATION SCHEDULE

APPRAISAL/VALUATI ONS ACKNOWLEDGMENT

COMPLIANCE AGREEMENT/ERROR S AND OMISSIONS

CORRECTION AGREEMENT

FINANCIAL CONDITIONS CERTIFICATION

FIRST PAYMENT NOTIFICATION

FLOOD HAZARD DETERMINATION

INITIAL ESCROW ACCOUNT DISCLOSURE STATEMENT

BORROWER CONSENT TO USE TAX RETURN INFORMATION

IRS FORM 4506-C AND W9

LENDER HOLD HARMLESS

MINERAL RIGHTS ACKNOWLEDGMENT AND AGREEMENT

NOTICE REGARDING FURNISHING NEGATIVE INFORMATION

OCCUPANCY AFFIDAVIT AND FINANCIAL STATUS

SIGNATURE AFFIDAVIT

TAXPAYER CONSENT FORM

TEMPORARY PAYMENT COUPONS

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Title Company Documents

AFFILIATED BUSINESS AGREEMENT DISCLOSURE

CLOSING VERIFICATION AND AGREEMENT

NOTARY CERTIFICATION

TEXAS DISCLOSURE

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31

Seller Documents

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Warranty Deed • 3-5 pages • Must be notarizes • Conveys title to the buyer • Creates a vendor’s lien if there is a Mortgage • Recorded after closing

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32

Title Company Documents

1099-S

CERTIFICATION FOR NO INFORMATION REPORTING

AFFIDAVIT OF DEBTS AND LIENS

AFFIDAVIT OF IDENTITY

T-47 AFFIDAVIT

AFFILIATED BUSINESS AGREEMENT DISCLOSURE

CLOSING VERIFICATION AND AGREEMENT

NOTARY CERTIFICATION

SELLER PROCEEDS INSTRUCTIONS

TEXAS DISCLOSURE

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ACT III

Curtain Call- What Happens Next

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33

Celebrate Your Clients!

• Bring a closing gift • Take a picture of the big day using an Independence Title Agent One filter.

• Get a Video Testimonial

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Independence Title will send signed docs to the lender Once received, the lender will give funding approval.

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34

Fund & Disburse!!!!

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Seller

Funding emails are sent.

Buyer

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35

The Commission Disbursement Authorization The CDA, often referred to as the DA, is a document sent to the title company, attorney, or entity handling the closing. It gives instructions on how commission should be dispersed.

Always ask how you will be notified of funding.

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Necessary documents are recorded

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36

Title Policy

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Contact your Independence Title Business Development Rep TODAY and asked to be paired with one of our Escrow Teams!

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37

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