The Closing is the last step in the Purchase and Sale of Real Estate. This is the point in time when the money for the property and the title to the property changes hands between the buyer and the seller. There are two main types of Closings, the New York Style Closing and the Escrow Closing. Each is used in its own distinct method of effectuating the Purchase and Sale of Real Estate.
The New York Style Closing is best described as a big meeting of all of the parties involved in the transaction. In a commercial transaction the meeting may consist of the buyer, the seller, the real estate agents, the title company, the banker, an attorney for the bank giving the mortgage, and very often an attorney for the buyer and one for the seller as well. Once everyone is together at the same place the various parties review the various documents. Each looks to make sure that what they are offering to the others is correct, and, more importantly, each looks at what they are receiving to make sure that all of those documents are correct. In a residential transaction many times only the buyer, the seller and the title company are present.
Usually, the Purchase Agreement will set forth what documents are required to close on the sale of the property. Most often, the required documents will include the deed, a bill of sale for the personal property, assignments of guaranties and warranties that the seller is giving to the buyer, proper notifications to any lenders involved with the property, and most important of all, the keys to the property. The buyer needs to show up with money, or with the ability to pay through a wire transfer or some other means. Finally, the title company needs to deliver the title report.
The advantage to the New York Style Closing is that everyone who plays an integral role in the sale of the property is present for the sale. The idea behind the New York Style Closing is that since everyone is present, if there are any problems, discrepancies, or other such issues with the transaction or with any of the documents involved in the transaction, all such problems can be dealt with immediately. When all of the parties are in separate locations, the process can be gummed up as lawyers receive information, then need to relay the information to their client, offer counsel, receive their clients’ directions, relay this information back to the lawyers for the other parties involved, and so on and so forth. When the New York Style Closing is utilized, since the parties are placed face to face, they can deal with each other directly and immediately without having to set the transaction back.
The Escrow Closing is very different from the New York Style Closing. In the Escrow Closing the parties have limited contact if at all. In the Escrow Closing, the parties choose an escrow agent to finalize the transaction for them. So, instead of everyone getting together on a certain day to review all of the documents, sign what needs to be signed, and hand over what needs to be handed over, the parties have a certain date by which they have to provide the escrow agent with all of their finalized documents. Once they have received all of the required documents for the transaction, the escrow agent processes the transaction and often even records the deed and, voila, the property has been purchased and sold. The whole transaction is simple, easy, and quick.
The Closing serves as the end to the Purchase and Sale of Real Estate. The Closing serves as that point in time in the Purchase and Sale of Real Estate where the buyer, seller, and other parties involved in the transaction submit all of the documents required to finish the transaction either through an escrow agent or face to face as in the New York Style Closing. The bulk of the work in the transaction should already be done by this point, as the Closing is sort of like a final check of all of the documents to make sure that everyone dotted their i’s and crossed their t’s, and at the end, the buyer officially buys the property and the seller officially sells the property. If you have any questions regarding the Closing process, the Gabriel Law Office PLLC is happy to discuss any questions you may have or review your transaction. The Purchase and Sale of Real Estate can be complicated, and it helps to have someone working for you and looking out for the interests of you or your business. Contact the Gabriel Law Office PLLC and let us help make sure that legal issues are not an issue in the Purchase and Sale of Real Estate for you or your business.