The previous post discussed the team you would need to get the purchase started. They are the lender, the realtor and the home inspector. All of these professionals are people you get to choose. This time we’ll explore the role of the rest of the people who will help you in closing the good home. These people are chosen by someone else to help your deal succeed. The is called closing in the world of real estate.
The Loan Processor
This person is tasked with making sure your loan application is complete. They ensure all appropriate supporting documentation is collected before your application is sent for review and a decision. The loan processor is chosen by the lender. You will only hear from them if/when something is missing, incomplete, illegible, etc. In other words, if you never hear from the loan processor, it is only because your file is complete on the first try. The more complex the situation of the loan, the more likely you are to hear from the loan processor.
The appraiser is requested by the lender. A service provider typically has a pool of appraisers on call. Upon request, the middleman sends out whoever is next up. The selection is randomized to ensure impartiality. An appraiser will keep their contact with the buyer and seller to an absolute minimum. All they really want is access to the home. Once they have inspected the home, they look for comparable homes that sold recently and are relatively nearby. They do their calculations and submit their report to the lender. The lender notifies you of whether the home has appraised or not. If not, you will be unlikely to qualify for enough money to buy the home for the agreed upon price.
The Escrow Company
Even as the lender is requesting an appraisal, buyer and seller are opening an escrow with a company selected by the seller. This is the convention here in San Diego County. The escrow company is a neutral party working to ensure that everything in the contract is carried out. Contracts always mention an Ernest Money Deposit to be made by the buyer. The escrow company will need those funds as part of opening the escrow. If paid by check, the check will be immediately cashed. A wire transfer is also acceptable. Be very careful when doing a wire transfer. There has been an increase in wire transfer fraud in recent years. Double check everything with the particular escrow officer assigned to you before any wiring funds.
The Title Company
As a buyer, you want to be sure that you are buying the home from the legitimate owner/seller. This is where the title company comes in. They will search the chain of ownership as far back as possible and, assuming no problems are found, will then issue title insurance. Title insurance is good for as long as you own the home. It insures the buyer against anyone else showing up and claiming ownership of the home. This insurance is paid for by the seller so the seller gets to select the company. The lender will ask the buyer to pay for a [cheaper] rider insuring the lender against the same thing.
The Transaction Coordinator
These persons assist the realtors with the administrative side of things. The buyer may hear from the buyer’s realtor’s transaction coordinator while the seller may hear from the seller’s realtor’s transaction coordinator. This is rare as the individual realtors typically speak with their respective clients exclusively. Normally, anything the transaction coordinator needs is requested through the realtor.
The Notary Signing Agent
This is a specially trained Notary Public who will meet with the buyer to go over the loan documents one final time while the documents are signed by the buyer(s) and notarized by the notary signing agent. If need be, you can request that the signing take place at your home, your office or some other location convenient to you. Escrow companies set up the signing to happen at their office but this does not have to be the case if you are too far away. Signing can even happen far from the purchase area. For example if you are at a convention or at off-site training. The escrow company can arrange to have a sister company accommodate your needs closer to your location.
These are the other main players who come together to help you and the seller in closing the good home. As you go through the escrow, you can always ask questions. Your realtor and your lender should be able to answer any remaining issues. If you need help with either, contact me at 760 622 5087 as I can fulfill both roles and save you some headaches.