Residential Real Estate Closings in Georgia Parties, Procedures & Forms

Pre-Closing Stage: The period of time prior to an upcoming closing and any activities that are performed by the attorney’s office in preparation for the closing Title Matters (order title search, review title report, request copy of seller’s title policy) Loan Payoffs- any outstanding loans on the property Schedule closing and keep in contact with parties USA Patriot Act (search the SDN List)-Dangerous nationals not allowed to buy or sell real estate Confirm hazard insurance has been purchased (get copy of declarations page) -Ga supreme court decision- only attorney can do closing. More accountability, paralegal can draft under supervision of the attorney.

Pre-closing stage, cont. Business entity considerations (formation and authority documents)-that it’s in good standing and the person signing has authority to sign. Ascertain HOA and COA Dues Organize documents from lender in the loan package Closing secretary usually prepares closing documents (i.e., HUD, deed, 1099, affidavits) 1099- reports to IRS the sale of the property

The Closing: Consummation of the Transaction Performed by an attorney in Georgia Follow lender closing instructions (even down to the color of ink used to sign documents) Confirm identification of parties Parties review and sign documents-require 2 forms of photo ID Witness and notarize documents At end of closing, disburse seller proceeds and broker commissions Either issue title insurance policies now or in post-closing stage

On the day of closing, buyer and seller should bring: Buyer and Seller should bring the following items to closing: Original Power of Attorney, if applicable- POA for seller recorded with warranty deed and POA for buyer recorded with security deed Two forms of ID Invoices to be paid from closing Verification of social security number Any funds to be collected by the attorney Seller – keys and garage door openers Buyer – copy of hazard insurance policy with or w/o paid receipt Seller – forwarding address & new phone number Other documents required by the attorney or lender (from: http://www.closingsource.net/ (Buyer and Seller tabs)

Typical Closing Documents Following is a list of the documents that a buyer signs where the buyer obtains a loan:   HUD-1 Settlement Statement: sets out all receipts and disbursements made by, on behalf of, or to the buyer and seller in the transaction.   -everyone signs   Promissory Note: outlines the material terms of the loan including interest rate, term, maturity date, principal and interest payment amount, late penalty and prepayment penalty.     Security Deed & Waiver of Borrower’s Rights: recorded in the public records after the closing

Typical Buyer Closing Docs, cont. Agreement to Cooperate- both parties will be asked to sign Affidavits: Where applicable, borrower executes sworn statements relating to: - owner-occupancy of the property - current employment and income - name variations or aliases - the non-existence of secondary financing - truth and accuracy of all information supplied to the lender

More Typical Buyer Docs Disclosures and Acknowledgements: Where applicable, borrower may sign the following disclosures and acknowledgements: - Acknowledgement that a default in payment of the loan could result in a foreclosure - Acknowledgement that the closing attorney/settlement agent represents the lender - Disclosure of the Annual Percentage Rate ("APR") as reflected on the TIL - Disclosure of projected escrow account activity for one year - Acknowledgement that property is or is not located within a flood zone - Acknowledgement of receipt and review of termite letter - Acknowledgement of receipt and review of survey - Disclosure of information relating to lender's history of transferring/selling loans

More Typical Buyer Closing Docs Loan Application - standard form which reflects the income, assets, debts and other pertinent information used to qualify borrower for the loan.   IRS form W-9 - verifies the borrower's social security number for the reporting of payment of interest to the IRS.     IRS forms 4506 and/or 8821 - authorizes the lender to obtain information from the IRS to verify information on application form.   First payment letter - shows total payment amount, date of first payment and information regarding where to remit payment.

Typical Seller Closing Docs HUD-1 Settlement Statement Acknowledgement that the closing attorney/settlement agent represents the lender IRS form 1099: reports the sale to the IRS Deed conveys title to buyer; recorded in public records Affidavits: Where applicable, seller executes sworn statements relating to: - name variations or aliases - knowledge of matters relating to the title - other matters specific to the particular transaction Agreement to Cooperate

Post-Closing Stage Disbursement of remaining funds Disbursement of documents - Return loan package to the lender - Send certain documents to be recorded in the county public records - Disburse recorded deed (to buyer) and security deed (to lender) Correct errors made in execution of documents at the closing