Final Steps & Recording
Once the Home Inspection period and Appraisal have been completed, all that remains is final loan approval, signing and closing! Sellers will usually sign closing documents at the Escrow Company’s Office a few days before the actual closing date.
Sellers have only a few documents to sign, the most important being the Closing Statement which is called a “HUD-1”. The HUD-1 details the financial terms of the sale including all of the funds received and expenses paid by both the Buyer and the Seller. Seller expenses include Escrow, Title & Recording Fees plus Brokerage Commissions and Real Estate Taxes.
As taxes in Arizona are paid in arrears, there will always be taxes owed on your home when you sell it. For example, if you sell your home on April 30th, you will be liable for the taxes due from January 1st through April 30th. As the taxes will not be due until later in the year, the Seller must give the funds for those taxes to the Buyer so they will have them when the taxes are due.
If you have a loan and taxes and insurance are included in your monthly payment, then you will receive all of the funds the bank has withheld for these payments once your home is sold.
Final approval for the loan is usually not a problem as the Lender has been gathering and reviewing information since the contract was first submitted. Here is a quick summary of the steps common to the loan approval process:
Application: The Buyer completes an application and is given a list of documents they need to provide.
Assembling the Loan Package: A loan processor obtains all of the documents that will be needed to approve the loan. Most of these will be obtained from the Buyer but in some cases there are disclosures that must be signed by the Seller.
Appraisal: After the Inspection Period an Appraisal is ordered. Once completed it is returned to the lender and completes the Loan Package:
Underwriting: Final Loan Approval is made by the Underwriting department. Underwriters may require some additional information before giving their final approval.
Loan Documents: Once approved by Underwriting, the loan is sent to another department to prepare Loan Documents: The Loan Documents are sent to the Escrow Officer to prepare closing statements for signature by both Buyers and Sellers. Buyers with loans have quite a few papers to sign while Sellers only sign a Deed, HUD-1 (closing statement, see above), and sometimes a few miscellaneous documents.
Signing Documents: Document signing takes place at the Escrow/Title Company’s office. The Buyer is required to sign all documents at least three days prior to closing and it is recommended that the Seller also sign a few days prior to closing to ensure an on-time closing.
Closing and Recording: These are the final steps once all of the documents have been signed and funds for the purchase are received. The Escrow Officer “closes” the file, meaning they have received all of the funds and documents needed to transfer ownership to the new Buyer. The Escrow Officer issues an order to close and Pima County records the new Deed.
The Escrow Officer will issue a check for any funds due the Seller or they may have it wired to their Bank Account. The new Buyers are given the keys to the home and that’s it!
Important Note: The new Buyers are only given the keys once the property is recorded in their name and not a minute earlier!