December 31, 2009

The Close of the Year Brings the Close of a Transaction

Yesterday I attended what most people call “a closing.” In this case the client was the family Trustee for a home where the parent had passed on, leaving the property vacant. The home that sold was located in the Day Break Complex in South Ogden. During the time we were at the “closing” the escrow officer asked if this would be my last “closing” for the year. I pondered for a few seconds realizing that this year was almost over and that I would be starting over with more closings… but all would be into 2010.

The client and I began to talk about “closings” in general and I thought it would be good to review the differences between “closing” and “settlement” because it can be important to know the differences.

Yesterday, we were actually at “settlement” even though most people (including most agents) call it a “closing.” Settlement is where the parties involved in the transaction meet with a title escrow officer who reviews the paperwork including lending documents and the HUD-1 Statement to be sure all is in order. The Buyer and Seller meet with their respective real estate agents in a comfortable conference room… normally at different times and often with different title companies. Once the documents are all signed and there is total agreement, the property is then recorded by the County assessor and the money is sent to the parties as outlined in the Settlement process which took place earlier.

The recording process and the distribution of money is called “closing” in Utah. In this case both processes took place on the same day but in most cases there can be a 24 to 48 hours difference in time between settlement and closing.

Once the house is “closed,” the buyer becomes the new owner of the property and can begin to move in. The transaction is for all general purposes considered to be complete.

Closing is the ultimate goal for the seller and the buyer as the seller gets the money for the property and the buyer is anxious to receive title to the new home.