The Day of Closing
It is customary in Alachua County and Gainesville for the seller to pay for the owner's title insurance. Because of this, the seller chooses which attorney or title company will handle the sale of the property. They insure that all terms and conditions of the seller's and buyer's purchase and sale agreement, or contract, are met prior to the sale being finalized. This includes verifying title work and commitment, a clean survey, satisfaction of all liens, that all documents are executed and that money is dispersed to the right parties.
Upon completion of all instructions of the contract, closing can take place. The final document of all debits and credits is known as an HUD-1. This is a federal document used for closing all real estate transactions. It lets you know as the buyer or seller who is paying for what and we will review it prior to closing. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the buyer and appropriate title insurance is issued as outlined in the purchase and sale agreement.
At the close of the transaction, money is collected in one lump sum and distributed to each of the parties according to the contract and can include payments to inspectors, surveyors, and appraisers for any necessary repairs or other third parties necessary to close. As your real estate agent, I'll inform you of the acceptable form of payment. Typically this is with a bank's cashiers check or wire from your bank into the account of the closing agent. Often, closings can be done in person, by mail or other means necessary so long as the timelines set in the purchase and sale agreement are met.
Mortgage Escrow Account
A Mortgage Escrow Account is established with your lender to pay on-going expenses while there is a loan on the house. They were created to protect the lender from the home (for which they loaned you the money) not being covered by insurance or from the taxes not being paid. These expenses include property taxes, property insurance, mortgage insurance and other escrow items. Generally, the Escrow Account is partially funded at closing (called pre-paids) and the home buyer makes on-going contributions through their monthly mortgage payment. These funds are held by the lender in an interest free account. They pay your property taxes for you out of these funds once a year. In Alachua County, if property taxes are paid on November 30th, you will receive a 4% discount. Otherwise, they are due by the end of March. The anniversary date of your sale is usually the date the lender will pay the premium on the 12 month insurance policy.