[This article first appeared in the Chattanooga Times Free Press]
Q: What is the role of the closing agent in the home buying process?
A: If you're not familiar with what a title company's closing agent does, you may be surprised to learn he or she is an important part of your home buying team. The function of your closing agent is to direct and supervise the final phases of your property purchase transaction and to make sure the buyer and seller complete their obligations of the sales agreement. The closing agent works under the supervision of an attorney at the title company or law firm.
It's not unusual for most buyers to be unaware of who their closing agent is until the end stages of the sales transaction. Meanwhile your closing agent becomes active way before the finalization of your transaction. The first duty the closing agent is coordinating the details of the title insurance. A key function is to request a complete title investigation. Once the results of the report are sent back, it will reveal whether the seller has any outstanding liens, easements, and encumbrances that have to be taken care of by the seller before the sales transaction can be completed. As soon as the seller fixes all title problems, your closing agent will complete the final steps needed to have a title insurance policy issued to you.
Another important role of the closing agent is to supervise the payoff of the seller's lender (if applicable) and the funding of your sales purchase. They will be working with the buyer and buyer's lender to establish the details of the loan, down payment and closing costs associated with the buyer's loan. The closing agent will prepare closing documents and a closing statement according the financial details of the buyer and seller and their respective mortgage lenders, if applicable. The closing agent will abide by all written directions dictated by the buyer and the seller and ensures all aspects of the sale will be finished by the date of closing.
The closing agent will figure out each party's liability in regards to their share of taxes, interest homeowner association fees and insurance premiums. These will be reflected and collected at the time of closing. Any charges as defined by the purchase agreement will be presented on the closing statement and collected, as well. These could include such items as a termite letter, home warranty, closing costs paid by seller, title policy expense or property repairs.
The buyers and the sellers will meet with the closing agent and sign all necessary documents and deliver funds needed to finalize the sale. At the time of closing, the closing agent will transfer funds to pay off the seller. Once that happens, the agent will make a public recording of the deed to transfer the house to the buyer.
All fees charged by the closing agent are included in the closing costs on the closing statement. Locally, Tennessee and Georgia have different customary charges to the buyer and seller in the transaction. Consult with your Realtor to find out what are customary charges for your specific property sale transaction.
Get answers to questions you might have about real estate from Randy Durham, who is president of the Chattanooga Association of Realtors and a broker with Keller Williams Realty. His column appears on Sundays. Send your questions to Business Editor John Vass Jr. at firstname.lastname@example.org