Settlement or Closing Procedures in Maryland and Northern Virginia
"As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate." Source: HUD
WOW! ! ! That sounds awesome. But, all it means is that you own the property and there is a record of that ownership in the land records of the court house of the county in which your home is located. It is public information for all the world to know.
Put simply, title is the foundation of property ownership. It is the owner's right to possess and use the property.
BUT, before you record your new property ownership, you will have a settlement meeting with a title attorney or settlement officer at which all of the financial transaction will be signed. The seller will sign the deed transferring title of the property to you. You, the home buyer(s) will sign the mortgage documents and any other necessary documents required. You will also pay the balance of your down payment and closing costs. You'll receive the keys to your newly purchased home. The transaction will be entered into a standard document known as the HUD-1.
DOCUMENTS TO SAVE
By all means, save the HUD-1 Settlement Statement. This is proof of any tax deductible expenses you may have incurred along the way such as origination fee, discount points, pre-paid interest. Consult your tax adviser for legitimate tax deductible items.
DOCUMENTS INVOLVED IN THE SETTLEMENT MEETING
Deed: This is the proof of ownership which will be recorded and it will have the legal description of the property you have purchased.
Deed of Trust or Mortgage: This document is your agreement to repay your mortgage loan. It will be recorded in the land records along with your deed. Unless you are paying cash for the property, you will likely have a mortgage loan. You own your home, but you have a lien against it for the amount of the mortgage.
Survey: The title office will order a survey of your property (sometimes not condominiums) showing the boundaries of your properties, any structures including fences on it and the distances from the structures to the boundaries.
Title Inspection: This is the title attorney's verification that he has review the land records of the property and that there are no liens or encumbrances and you will receive a clear title to the property. Any liens discovered during the "search" of the records must be paid off or removed prior to transfer of title. Some liens or encumbrances could be unpaid taxes, unsatisfied mortgages, judgments, or restrictions on the use of the land.
Once the title attorney has reviewed the title and is satisfied that a title free of defects can convey, he will insure the title against claims. Title insurance is your policy of protection against loss of any claims that may arise in the future. The title insurance policy will protect you and your heirs for as long as you own the property and sometimes beyond.
WHAT SHOULD I EXPECT AT SETTLEMENT?
In Maryland and Virginia, buyers and sellers along with their agents and attorneys, if any, and the title attorney will meet around a table and the documents will all be explained to you in as much detail as you wish. You sign the necessary document and the sellers sign the necessary document. You receive your keys and everyone shakes hands. Our settlements are usually very friendly with sellers telling buyers little tips about the house, i.e., operation of the security system, who is a reliable heating/air conditioning service company, who is a good plumber, etc. Any potential problems should have been settled prior to the settlement meeting.
WARNING: Unless proper Power of Attorney is in place, all parties to the transaction will have to sign in person. A photo I.D. will be required by the title attorney. We had a husband travel 500 miles to settlement without his wife, a co-purchaser, thinking that he could just sign for her. No, no, no. All parties to the transaction must sign. If any or all parties are out of town, arrangements can be made to have deeds and deeds of trust sent overnight for signature. If a person cannot attend because of an emergency, we can arrange for a Power of Attorney for someone to sign for them. It has the full force of law and is often done. Talk to us if special arrangements are needed. We can help.
ENJOY YOUR HOME!