Closing Colorado real estate : Stage Four

The hard part is over. You found a house, made an offer and survived “being under contract”.  All the negotiations were successful and all that is left is to get ready for closing Colorado real estate smoothly and moving into your new Colorado home. But first…

Ahead of closing there are a couple of things to take care of:

• Set up the wire transfer. Most closing companies will not accept cashiers checks except for small amounts and cash is never accepted. A wire transfer can be set up in advance, but allow 2 days for the completion of it, just in case. And don’t worry, if it happens that the transfer of funds into the title company is not complete when you show up for the closing Colorado real estate, the closer may be able to verify the money has been sent by obtaining the confirmation number and conduct the closing anyway. The paperwork gets signed on time, the Buyer (new owner) gets the keys and when the money arrives, the funds will be dispersed. As long as the Seller is fine with this there is no problem.  Real estate brokerages get paid only when everything is complete. The closing company (or ask your RE agent) will give you the wire transfer routing info and instructions.

• Make arrangements to have utilities and services switched on at your new place. You should consider gas and electric, cable, phone, internet, trash/recycling services if it is not included in an HOA fee. The Seller will terminate services as of closing day and it is possible to set up the new services ahead of time to start the day of closing. The title company will transfer the water/sewer bill into your name at closing. They will escrow some money from the Seller, order the reading of the water meter on closing day and pay the final bill when it arrives. This is to protect the new owner. A lien may be placed against the house if the water bill is not paid.  I normally give my Buyer the contact information for the utilities previously associated with the address.

• Final walk through the property. As per the Colorado Contract to Buy, the Buyer is entitled to take a final look at the house before closing to satisfy themselves of its condition. It is a good chance to double check any items agreed to as part of Inspection Resolution have been completed, as well as reassure the Buyer that the Seller left everything they should have and didn’t create any damage when moving out.  Your RE agent will work with you to set a day/time within about 48 hours of closing Colorado real estate.

• Real Property Transfer Declaration. The county collects information about the sale. In particular it wants to know what property that is not the land and improvements, has changed hands and was included in the purchase price of the Colorado real estate. It is a way for them to make adjustments to property taxes as needed. For example, Mr and Mrs Buyer purchase a home in the Foothills. Included in the purchase price was a truck with plow attached, that they will need for their non-county maintained private road/driveway. They paid $250,000 for the property but the truck and plow is actually worth $15,000. Having a record of this makes it easier to adjust the market value of the property to $235,000. 

The Real Property Transfer Declaration is about the only document you will be required to “think” about and fill in, at closing. Because the Buyer will be asked to recall the condition of the improvement (Is the house in New, Good, Average or Fair condition?) as well as list the property that is being transferred and how much its replacement value is.  I like to go over this form with my Buyer before closing Colorado real estate. I then take a copy of it to closing and when the Buyer is presented with the document, I can give them the information to copy down. It saves brain space and time!

• Bring to closing your ID (and cashiers check if appropriate). Very important. A Buyer and Seller need to bring government issued identification to closing with them. Most of the time this will be a drivers license. The title company will not be able to conduct the closing without seeing and making a copy of your ID.  The cashier’s check will be made out to the title company – not your own name, as we used to recommend.

Closing in northern Colorado is conducted at the title company mostly. The time and date is by mutual agreement between Buyer and Seller.

If “everyone” is present, the set up will be around a conference table. The closer at the head of the table, the Buyer and Seller sitting each side of the closer.  The Buyers and Sellers agents (and maybe lender too) will sit the other side of their clients.  See below.

The real estate agents and lenders actually have a smaller role to play when we finally get to closing. Normally just signatures on 1-2 documents, while their clients sign a veritable stack! The agents are there as moral support and to answer questions or concerns as they arise, but as the Buyer/Seller discovers, the best person to explain and abridge the closing documents is the closer. They do this job several times a day and are well versed in giving the short version of wordy documents.

There are no silly questions and I advise my clients to ask sooner, rather than later, if something is amiss or needs clarification. You are probably not surprised to hear me say that the same questions come up again and again. But that’s another whole post!

 Ok… so what can go wrong?

•  Somebody forgets their cashiers check or ID – it’s a delay, but no big deal if it can be easily retrieved.

•  Occasionally, despite a thorough checking of the settlement statements ahead of time, there is a last minute change to the settlement statement and the “cash at closing” figure may be altered. If the Buyer has now transferred too much money, the title company will either cut them a trust account check or cashiers check for the refund. If the Buyer has come up a bit short, its not a problem to send them scurrying to the bank for a cashiers check for the difference. Again, a delay but nothing to get uptight about.

The only thing that will stop closing is a major change to circumstances of the sale. The house burns down over night, the Buyer or Seller fail to turn up to closing etc. Neither of these things have ever happened to me (touch wood) but another agent did share this horror story with me back in 2006…

It had been contentious deal the whole way through the process. The Buyer and Seller just didn’t see eye to eye on many things and tended to rub each other the wrong way. At the closing table the Buyer said something that the Seller deemed to be the final straw. The Seller stood up and announced he no longer wanted to sell to this Buyer and the deal was off! Yikes!

 I’m sure this was not “the end” as the Buyer has rights and can force the sale at this point. But it was the end for that day.

Every now and then its just not going to work for the Buyer and Seller to be in the same room at the same time for closing. Perhaps one party is out of state or has a higher priority event on when closing was scheduled. Or perhaps there is a relationship dynamic (EG: messy divorce) that warrants separate closings for each party. Not a problem.

Mail out closings occur when one party can’t be physically present. If we know about it early enough, the closing documents are mailed to the client and an appropriate notary public is arranged so the client can sign where they are. This is done ahead of the closing date but the documents are executed on closing date still.

Another solution is for one party or person to come in at a separate time/date to sign their paperwork. For example, I had a client who was booked on a vacation cruise and wanted to leave a day earlier than originally planned, to avoid imminent bad weather. We arranged an early signing and I went back on closing day to pick up her copies of the paperwork and her new house keys.

In another case, the Sellers were recently divorced and the sale of the home they once shared, had been forced by the divorce decree. They simply wanted to avoid each other and a potential ugly scene, so the title company set up separate rooms for them to sign in, at the same time. Problem solved… or at least contained!

Lastly, the RE agent and title company can assist the Buyer or Seller to put in place a Power of Attorney. This signed document gives someone the Buyer chooses, the legal ability to sign closing documents for them when they cant be present, or in the event the client is physically or mentally incapable at the time. The Power of Attorney document that is used is limited to the real estate deal.  The person who has power of attorney is not able to use it for health care, financial or other signing power.

In short, the title company, lender and real estate agents (your team) are in constant communication. We work together to make every closing (and they are all different) smooth and tailored to fit the clients needs.  With a little heads-up, we can work with almost any situation!

 The final post in this series is what happens Post Closing… stay tuned.