Buying or selling a home is a process that involves multiple steps and interactions. If you are considering either, take some time to understand how the process works before diving right in. Typically, the seller has fewer responsibilities than the buyer throughout. One of the last steps in the process is signing over the title to the buyers, which happens at the closing.
Preliminary Steps
The buyer and the seller must each take some preliminary steps to initiate this process. The seller's portion consists of listing his home on the market and waiting for an offer. The buyer's end of the deal is a little more involved. First, buyers are generally advised to get preapproved for a mortgage loan to get an idea of their price range and monthly mortgage payments. Next, they can select a house and make an offer. Their real estate agent writes up a formal contract for an offer to present to the seller. The seller can either accept the offer or decline it and come back with a counter offer. Once a sales agreement is finalized, the buyer can formally apply for a mortgage loan and schedule a closing date.
Closing
The closing day is arranged for the buyers and sellers to sign the necessary documents required and prepared by the mortgage lender. Some of the more important pieces of the package for the buyers to sign are the note and mortgage, also called a deed of trust, depending on what state you live in. The mortgage document acts to secure the property for the lender by placing a lien on the property, or placing the property in a trust in states that utilize the deed of trust. It also outlines the terms of the loan. The seller signs a warranty deed granting his ownership in the property to the new buyers, which completes the transfer of title. Depending on how the appointment is set up, the buyers may or may not see the warranty deed on closing day.
Warranty Deed
Warranty deeds are used to transfer ownership between parties. The deed establishes the full names of the sellers and buyers along with a legal description of the property. By signing a warranty deed, the seller states that he owns the property free of any liens and has the right to transfer his ownership to the buyers. The signing is done in the presence of a notary public, who also signs and seals the deed. After the closing is completed, the warranty deed and mortgage documents are presented to the county clerk or recorder to be filed on record. The warranty deed is often returned to the buyers via the mail.
Title
The title to a property is not one simple document. It's actually a listing, or history, of the transactions that have occurred regarding that property. These include purchases, sales, mortgages and liens. The county records are used to perform a title search, and the information is complied into the title report. When a property is sold and the warranty deed is recorded, the new deed will show up first on the title report. The buyers now appear as the new owners of the property.