Congratulations! Your file has made it to the closing table and all parties have signed. Now what?? Many buyers and sellers come to closing with misconceptions about what they think will happen next.
1. The buyer expects to get the keys when they are done signing;
2. The buyer expects to leave the title company and immediately start moving into the property;
3. Sometimes the buyers already have contractors lined up to meet them at the property;
4. The seller expects to receive a check for proceeds at the closing table; and
5. The sellers want to cancel their insurance as soon as they leave our office.
So what is the next step that needs to happen for these things to occur?
The title company has to FUND the file. The “funding” process includes the following steps:
1. Approval by the lender: Most lenders require that we scan many of the signed documents to them for their review and approval. We are not authorized to fund until the lender has issued their funding approval. Some lenders will permit a “table funding” which means we are permitted to fund as soon as all documents are signed but that is not how most of them handle their funding approval. Each lender has a slightly different funding process and each lender requires different documents be sent to them for review.
2. Lender funds must be received in our account: Lenders are split on how they handle funding their loans. Some lenders will send their wire in advance of closing. Some lenders will not send their funds until they have completed their funding review and approval. Our regulatory agency, the Texas Department of Insurance, prohibits us from funding until we have all funds required from the parties so until we receive the lender’s funds, buyer’s funds and sometimes seller’s funds we are not able to finish the funding process.
3. Buyer’s funds must be received in our account: It would surprise you to hear that many buyers come to closing and then want to go to the bank to get their cashier check or send their wire. As noted above, we are unable to fund until all monies have been receipted.
Until we have all three of these items listed above we are not able to disburse funds, release any keys that have been delivered to us or record the documents from closing.
How can realtors help with the funding process?
1. Be cautious about scheduling closings too late in the day. The steps above can take a little bit of time or a lot of time depending on the parties. The earlier your parties can sign in the day the better the chances the file will fund the same day. Banks have a wire cut off that ranges from 4:00 pm to 4:30 pm depending on the bank. If a closing is scheduled for later in the day it can be very challenging to get all of the tasks listed above completed before that wire cutoff time.
2. Counsel your clients on what they should expect on the day of closing as to the funding process.
3. Help remind your buyer clients about their funds for closing. The buyers have a lot of things going on as the closing date gets near, and it is very easy for them to get confused about the process. We do our best to explain the process to them, as well as discussing all of the warnings about wire fraud with them, but it is great when our realtor clients help remind their customers as well. Ideally buyers should bring their funds to closing with them so that there is no delay in the funding process.
4. Discuss keys transfer with your clients in advance. The title company is not really responsible for handling the keys transfer. As a courtesy we pass them between the parties but ultimately the keys transfer process is between the clients and their realtors and a plan should be discussed between the agents before closing as much as possible.
Our closing teams at Texas National Title are wizards when it comes to getting your files funded! We are the experts that you need and the partners that you can trust in all things escrow and title! Please do not hesitate to contact us with any questions that you have.