which is also called a settlement. Settlement refers to the process of transferring ownership of real estate from one person or entity to another. Ownership in real estate is determined by who is on the title. Title is a legal term for a bundle of rights in a piece of real estate in which a party owns a legal interest. The rights in the bundle may be separated and held by different parties. Title also refers to a formal document that provides evidence of ownership. Settlement or closing refers to the process of transferring ownership of real estate from one person or entity to another. At the closing, the buyer will sign many documents related to the purchase of the home. These documents will include the HUD-1 settlement statement, the note, the deed of trust or mortgage, and several others. To prepare your property for closing, the settlement company will order a title search and updated lien payoffs. A title search is a process by which the settlement company researches the history of the property through the land records to ensure that you are the actual owner and that there are no complications in the current ownership and titling of the property. They also request updated lien payoffs which means they request a final payoff amount from your mortgage company and any other liens attached to your house. The payoff is the exact dollar amount that needs to be paid off on the day of settlement. Sometimes, upon performing this due diligence, the settlement company will discover things that you as the owner never knew existed, or they will encounter mistakes that were once made by other banks or companies. The settlement company is usually able to get information easily and schedule your settlement for the date originally planned. This process is enabled and made secure through the closing task, where an escrow or a settlement agent will be hired as a disinterested third party. The escrow or settling agent will take all
95
Powered by FlippingBook