The Settlement Process

What To Expect at Settlement

Man and two womens with file in hand

The purchase or refinance of a home is one of the biggest events that most people will have during their lifetime; it is important to know what to expect at settlement and have a member of the Diamond Team there to help you.

At settlement, there will be a lot of paperwork! Reading every page would take hours and settlements don’t last that long. It is important to have an experienced real estate attorney working on your case whose responsibility is to give concise explanations of what is being signed.

Four documents deserve special attention in your settlement: the Settlement Statement and Closing Disclosures which list the costs associated with your transaction, the Note which defines your loan amount and interest rate, the Deed of Trust (which evidences your lenders lien on the property) and the Deed in purchase transactions.  

  

This includes the sales prices, loan amounts, points, lender preparation fees, prepaid interest, escrow, settlement fees, title examination and insurance expenses, recording expenses, transfer taxes, tax prorations, credits, down payments, and what funds are due.

While estimates are not exact, these amounts should conform in principle with your sales contract and agreement with your lender. Each amount should be reviewed and explained.

The Note is your contract with the lender. Review it carefully. It should list your interest rate, fixed or adjustable (change date and margin), term or your loan, late charges, and prepayment penalty if any. Do not sign a note with incorrect information on it.

The Deed of Trust indicates the amount and the term of the loan. The Deed of Trust gets recorded at the courthouse as evidence of the lien on your property. Do not sign a Deed of Trust with incorrect information on it.

The Deed is your document of transfer. Review it carefully. Make sure your name is spelled correctly and the sales price is reflected properly. Be sure it states if you are a first-time buyer in Maryland as they can save you state transfer taxes.

Having the best attorney on your side can make a difference in a successful settlement! Remember, it is the home buyer’s right to choose who does their settlement!

Call Diamond Title Corp. (301-670-3445 or 703-893-5421), and compare, and experience, like thousands of other satisfied clients who know,
“A Diamond Settlement Is Your Best Friend!”

Robert P. Goldman, Esq. specializes in Real Estate law for Diamond Title Corp. He was noted in the Washingtonian as the Real Estate Lawyer “that really delivers.”  Mr. Goldman is a member of the Bar in Maryland, Washington DC, Virginia, New York, and is admitted to practice before the Supreme Court of the United States. Mr. Goldman has been practicing law for over 30 years.

Settlement Checklist

The following is a checklist of what should be brought to settlement. Please read this carefully and determine what you are missing.

  • Sellers
  • Buyers
  • Brokers

Sellers Checklist 

  1. If you presently have a mortgage on your property, we will obtain a written "payoff demand" letter from your lender. Please provide us with your loan number, social security number and the name, telephone number of your lender. If, in addition, we are to pay off a home equity line or another loan, let us know this as well. Please do not "draw" on the line after today without letting us know. Payoffs can often take 5 business days to process.
  2. Please email or fax us back the Seller information forms that we will send you and/or your agent. (diamondtitle@erols.com)
  3. If you have a copy of your owners title insurance policy and prior survey from when you purchased your property, please send us both by email at diamondtitle@erols.com or fax at (301) 670-3447.
  4. If the property is a condominium or has an HOA, please supply us with the name, phone number and address of the management company along with your account number. Please call us with the social security number of each seller (or the Tax ID number, if a seller is not an individual). Please send us a copy of your HOA or Condo. Resale package disclosures.
  1. We assume that each seller will attend settlement in person. Please let us know if any seller will not be attending settlement so we can coordinate for what needs to be done.
  2. We will order a title report on the property showing all recorded liens, defects, and other potential problems in the chain of title. We will contact you immediately if there are problems with your title. Make sure we know where to reach you if you are traveling.
  3. You should advise all appropriate utility companies of the sale, e.g. gas, electric etc.
  4. Advise your homeowner's insurance company of the closing date Be sure not to cancel your insurance if you have a rent-back. Furthermore, keep the coverage in place at least for 48 hours past closing.
  5. When we pay off your mortgage, your mortgage company must, under law, refund you any escrow/reserves they may be holding.
  6. Please bring your house keys, garage door openers, mail box keys, warranties on appliances, or information on the alarm system, if applicable, to settlement.
  7. When will we actually close? Everyone will work towards settling on the target date selected by the buyer and seller. Call our office to coordinate your scheduling.
  8. When will you get your sales proceeds? That depends on your jurisdiction.  In Virginia, recording the new Deed and Deed of Trust is required before disbursement.  So normally allow 24-48 hours.  We will do it as quickly as possible.  The courthouse title search also needs to be updated.  Generally in Maryland and Washington DC, it is normally between 6-24 hours after all documents have been signed and received by our office.
  9. How will you receive your money? Most times payoffs and sale proceeds are wired directly into your bank account
  10. Please bring current photo identification to settlement (this is required by our title insurance underwriter) and a second form of ID which can be a passport, social security card, credit/debit card or work ID.
IMG_2338

Buyers Checklist 

  1. Diamond Title Corp.will help handle many of the legal details for your closing.
  2. Check with your lender about their requirements for proof of hazard insurance, including whether or not a master insurance certificate (if a condo) will be needed. In some cases, a termite inspection will also be needed. Your real estate agent will assist with the termite inspection (some condos do not require termite inspections). In most contracts, it says who pays for the termite inspection as well as payment for any repairs required prior to closing.
  3. DC, MD, and VA no longer have antiquated Dower laws; a married person may now mortgage and sell property in their sole name without the consent of their spouse. However, if you are buying a property with another person (married or otherwise) but only one of you is borrowing the funds (e.g. one person is on the Note), each person to be listed on the Deed must attend closing in order to sign the Deed of Trust encumbering the property for the lien to be perfected. Please let us know as soon as possible if the title is to be vested in names other than the just the borrower (s).
  4. Make sure that you have provided both Diamond Title and your lender with your complete legal name for title purposes. For example, if you use your middle initial, as opposed to your middle name, make sure both your lender and our office know about it. We also need to know how the buyers will take title (Tenants in Common, Joint Tenants, or Tenants by the Entirety). We can explain the benefits of each method to you.
  5. If the property is a condominium, most jurisdictions requires the seller to obtain certain condominium resale documents for your review. Review your condo documents and the accompanying certificate carefully to be sure you understand the general and special assessments (if any) and requirements or rules related to your unit.
  6. If this is not a condominium, you may want and your lender may require a survey. There are two main types of surveys. The first type of survey is called a location drawing and does not mark the boundaries of the property, it is less specific and also less expensive. The second type of survey is called a boundary survey which is more specific. It notes the property boundary lines and is significantly more work to prepare and has a higher cost. (much better for adding fences or additions to the property) The highest level of survey is called an ALTA survey.  Let us know as early as possible if you are interested in getting a survey done.
  7. If you are the subject of any tax liens, court judgments, bankruptcy proceedings, or mental competency proceedings, please let us know as soon as possible.
  8. Be sure to be in contact with your loan officer as your Closing Disclosure must be signed at least three (3) days prior to closing or your closing may be rescheduled.
  9. Be sure to do your walkthrough at least one (1) to three (3) days in advance of closing in case there are any issues or repairs that need to be resolved.
  10. If the buyer is a corporation, a limited partnership, or a limited liability company, please produce a Certificate of Good Standing at the settlement that is no more than thirty (30) days old. We will also need copies of your entity documents such as Articles of Incorporation or Organization and Bylaws or Operating Agreements along with lists of officers and members. .
  11. How much do I bring to settlement? Sometimes, we will not be able to give you an accurate answer until the day of settlement. You must wire the amount for settlement in the amount on your Final CD or Settlement Statement. You should also bring a personal check for any small additional payment due. If you send us a wire, the wire must be received and acknowledged by our bank on the morning of the day of settlement. Please call us for wire instructions.
  12. There are two types of title insurance policies. Your lender will require a "Mortgagee's Policy" that does not afford you, the buyer, any coverage. You should also obtain an "Owner's Policy" of title insurance which provides title insurance coverage to you for an one time additional cost. If you are uncertain as to whether you should obtain an Owner's Policy of title insurance, please call our office to discuss the benefits.
  13. Your lender will send you a copy of the appraisal. Normally it is emailed and will verify the market value of your new property.
  14. A few days before settlement, a buyer should arrange for the utilities to be placed in the buyer's name. Washington Gas provides natural gas to Maryland, Virginia, and DC. Their telephone is (202) 624-6049Potomac Electric Power Company provides electrical power throughout the metropolitan area but is predominantly in Maryland and DC. Their telephone is (202) 833-7500. In Virginia, you can contact Dominion Virginia Power at (888) 667-3000.

Brokers Checklist 

  • Please keep an eye on the buyer’s and seller’s checklists to make sure that all is accomplished in advance of settlement.
  • Please arrange for your walk-through inspection in advance of closing.
  • If there is a termite inspection required, please arrange to have a copy of the report faxed to us before closing.
  • If this is a condo, please arrange for the necessary condo association documents to be delivered to Purchaser. If we are to collect for this, please advise us in advance.
  • If your firm has an earnest money deposit in excess of commission, please wire or bring a check for the excess to the settlement made payable to "Diamond Title Corp".
  • If the date of closing changes, please keep in touch with us to coordinate for the new settlement date.
  • Selling agent: Please check with the buyers' lender to make sure the hazard insurance policy (or master insurance certificate, if a condo) has been received.

Please remember that we do not have the listing agreement, so please fill out the commission form we send you with the correct listing broker and selling broker commissions and any applicable broker or administrative fee charges to be put on the settlement statement.  Thank you very much!  The Diamond Team!

Man with File In Hand With Two Womens

The Washington (MD-DC-VA) Process

Step One

When a buyer and seller have in their hands a ratified (signed by both buyer and seller) sales contract, one of the parties should send it by email (diamondtitle@erols.com ) to us or fax it to (301) 670-3447 or EFAX 202-351-05560 for review. Upon our receipt we will order a title report, survey (if requested), payoff letters for the Seller’s loan(s) (if any), and all other information and documents needed for our underwriter to be able to ensure the buyers' new title to the property.

This process takes one to two weeks to complete, and the information gathered can be incomplete or inconsistent, requiring further inquiries and conversations with our staff. Please be patient, we are working hard to get everything ready and make your purchase sale as smooth and correct as possible.

Step Two

Once the Seller’s title is reviewed and found to be insurable by our underwriters, the survey (if done) will be reviewed and approved and the buyer’s loan has  been approved, then we will be in touch with the buyers (or their agents) to arrange a convenient time and place for the closing. Often the sales contract will specify a date if the words "time is of the essence" are contained in your contract; if time is not of the essence, a reasonable time is implied by law. Closings are ideally held in our conference room where any last-minute details can be accommodated. We can also close at your choice of location in many instances.  Please call our office to discuss it.

Step Three

A couple of days prior to your closing date, the buyers customarily do a "walk-through" inspection of the property, noting any unfulfilled contract items). We will email the Buyers and Sellers the settlement statement and the Buyer will arrange a wire from their bank or credit union payable to "Diamond Title Corp." for the exact amount needed at closing.

We also do proration adjustments through the day of closing including the real estate taxes and assessments between the parties.  When we meet, we go through all of the documents for signing and soon, you are done!  Simple!

Settlement Checklist

The following is a checklist of what should be brought to settlement. Please read this carefully and determine what you are missing.

  • Sellers
  • Buyers
  • Brokers

Sellers Checklist 

  1. If you presently have a mortgage on your property, we will obtain a written "payoff demand" letter from your lender. Please provide us with your loan number, social security number and the name, telephone number of your lender. If, in addition, we are to pay off a home equity line or another loan, let us know this as well. Please do not "draw" on the line after today without letting us know. Payoffs can often take 5 business days to process.
  2. Please email or fax us back the Seller information forms that we will send you and/or your agent. (diamondtitle@erols.com)
  3. If you have a copy of your owners title insurance policy and prior survey from when you purchased your property, please send us both by email at diamondtitle@erols.com or fax at (301) 670-3447.
  4. If the property is a condominium or has an HOA, please supply us with the name, phone number and address of the management company along with your account number. Please call us with the social security number of each seller (or the Tax ID number, if a seller is not an individual). Please send us a copy of your HOA or Condo. Resale package disclosures.
  1. We assume that each seller will attend settlement in person. Please let us know if any seller will not be attending settlement so we can coordinate for what needs to be done.
  2. We will order a title report on the property showing all recorded liens, defects, and other potential problems in the chain of title. We will contact you immediately if there are problems with your title. Make sure we know where to reach you if you are traveling.
  3. You should advise all appropriate utility companies of the sale, e.g. gas, electric etc.
  4. Advise your homeowner's insurance company of the closing date Be sure not to cancel your insurance if you have a rent-back. Furthermore, keep the coverage in place at least for 48 hours past closing.
  5. When we pay off your mortgage, your mortgage company must, under law, refund you any escrow/reserves they may be holding.
  6. Please bring your house keys, garage door openers, mail box keys, warranties on appliances, or information on the alarm system, if applicable, to settlement.
  7. When will we actually close? Everyone will work towards settling on the target date selected by the buyer and seller. Call our office to coordinate your scheduling.
  8. When will you get your sales proceeds? That depends on your jurisdiction.  In Virginia, recording the new Deed and Deed of Trust is required before disbursement.  So normally allow 24-48 hours.  We will do it as quickly as possible.  The courthouse title search also needs to be updated.  Generally in Maryland and Washington DC, it is normally between 6-24 hours after all documents have been signed and received by our office.
  9. How will you receive your money? Most times payoffs and sale proceeds are wired directly into your bank account
  10. Please bring current photo identification to settlement (this is required by our title insurance underwriter) and a second form of ID which can be a passport, social security card, credit/debit card or work ID.
IMG_2338

Buyers Checklist 

  1. Diamond Title Corp. will help handle many of the legal details for your closing.
  2. Check with your lender about their requirements for proof of hazard insurance, including whether or not a master insurance certificate (if a condo) will be needed. In some cases, a termite inspection will also be needed. Your real estate agent will assist with the termite inspection (some condos do not require termite inspections). In most contracts, it says who pays for the termite inspection as well as payment for any repairs required prior to closing.
  3. DC, MD, and VA no longer have antiquated Dower laws; a married person may now mortgage and sell property in their sole name without the consent of their spouse. However, if you are buying a property with another person (married or otherwise) but only one of you is borrowing the funds (e.g. one person is on the Note), each person to be listed on the Deed must attend closing in order to sign the Deed of Trust encumbering the property for the lien to be perfected. Please let us know as soon as possible if the title is to be vested in names other than the just the borrower (s).
  4. Make sure that you have provided both Diamond Title and your lender with your complete legal name for title purposes. For example, if you use your middle initial, as opposed to your middle name, make sure both your lender and our office know about it. We also need to know how the buyers will take title (Tenants in Common, Joint Tenants, or Tenants by the Entirety). We can explain the benefits of each method to you.
  5. If the property is a condominium, most jurisdictions requires the seller to obtain certain condominium resale documents for your review. Review your condo documents and the accompanying certificate carefully to be sure you understand the general and special assessments (if any) and requirements or rules related to your unit.
  6. If this is not a condominium, you may want and your lender may require a survey. There are two main types of surveys. The first type of survey is called a location drawing and does not mark the boundaries of the property, it is less specific and also less expensive. The second type of survey is called a boundary survey which is more specific. It notes the property boundary lines and is significantly more work to prepare and has a higher cost. (much better for adding fences or additions to the property) The highest level of survey is called an ALTA survey.  Let us know as early as possible if you are interested in getting a survey done.
  7. If you are the subject of any tax liens, court judgments, bankruptcy proceedings, or mental competency proceedings, please let us know as soon as possible.
  8. Be sure to be in contact with your loan officer as your Closing Disclosure must be signed at least three (3) days prior to closing or your closing may be rescheduled.
  9. Be sure to do your walkthrough at least one (1) to three (3) days in advance of closing in case there are any issues or repairs that need to be resolved.
  10. If the buyer is a corporation, a limited partnership, or a limited liability company, please produce a Certificate of Good Standing at the settlement that is no more than thirty (30) days old. We will also need copies of your entity documents such as Articles of Incorporation or Organization and Bylaws or Operating Agreements along with lists of officers and members. .
  11. How much do I bring to settlement? Sometimes, we will not be able to give you an accurate answer until the day of settlement. You must wire the amount for settlement in the amount on your Final CD or Settlement Statement. You should also bring a personal check for any small additional payment due. If you send us a wire, the wire must be received and acknowledged by our bank on the morning of the day of settlement. Please call us for wire instructions.
  12. There are two types of title insurance policies. Your lender will require a "Mortgagee's Policy" that does not afford you, the buyer, any coverage. You should also obtain an "Owner's Policy" of title insurance which provides title insurance coverage to you for an one time additional cost. If you are uncertain as to whether you should obtain an Owner's Policy of title insurance, please call our office to discuss the benefits.
  13. Your lender will send you a copy of the appraisal. Normally it is emailed and will verify the market value of your new property.
  14. A few days before settlement, a buyer should arrange for the utilities to be placed in the buyer's name. Washington Gas provides natural gas to Maryland, Virginia, and DC. Their telephone is (202) 624-6049Potomac Electric Power Company provides electrical power throughout the metropolitan area but is predominantly in Maryland and DC. Their telephone is (202) 833-7500. In Virginia, you can contact Dominion Virginia Power at (888) 667-3000.

Brokers Checklist 

  • Please keep an eye on the buyer’s and seller’s checklists to make sure that all is accomplished in advance of settlement.
  • Please arrange for your walk-through inspection in advance of closing.
  • If there is a termite inspection required, please arrange to have a copy of the report faxed to us before closing.
  • If this is a condo, please arrange for the necessary condo association documents to be delivered to Purchaser. If we are to collect for this, please advise us in advance.
  • If your firm has an earnest money deposit in excess of commission, please wire or bring a check for the excess to the settlement made payable to "Diamond Title Corp".
  • If the date of closing changes, please keep in touch with us to coordinate for the new settlement date.
  • Selling agent: Please check with the buyers' lender to make sure the hazard insurance policy (or master insurance certificate, if a condo) has been received.

Please remember that we do not have the listing agreement, so please fill out the commission form we send you with the correct listing broker and selling broker commissions and any applicable broker or administrative fee charges to be put on the settlement statement.  Thank you very much!  The Diamond Team!

Man with File In Hand With Two Womens

The Washington (MD-DC-VA) Process

Step One

When a buyer and seller have in their hands a ratified (signed by both buyer and seller) sales contract, one of the parties should send it by email (diamondtitle@erols.com ) to us or fax it to (301) 670-3447 or EFAX 202-351-05560 for review. Upon our receipt we will order a title report, survey (if requested), payoff letters for the Seller’s loan(s) (if any), and all other information and documents needed for our underwriter to be able to ensure the buyers' new title to the property.

This process takes one to two weeks to complete, and the information gathered can be incomplete or inconsistent, requiring further inquiries and conversations with our staff. Please be patient, we are working hard to get everything ready and make your purchase sale as smooth and correct as possible.

Step Two

Once the Seller’s title is reviewed and found to be insurable by our underwriters, the survey (if done) will be reviewed and approved and the buyer’s loan has  been approved, then we will be in touch with the buyers (or their agents) to arrange a convenient time and place for the closing. Often the sales contract will specify a date if the words "time is of the essence" are contained in your contract; if time is not of the essence, a reasonable time is implied by law. Closings are ideally held in our conference room where any last-minute details can be accommodated. We can also close at your choice of location in many instances.  Please call our office to discuss it.

Step Three

A couple of days prior to your closing date, the buyers customarily do a "walk-through" inspection of the property, noting any unfulfilled contract items). We will email the Buyers and Sellers the settlement statement and the Buyer will arrange a wire from their bank or credit union payable to "Diamond Title Corp." for the exact amount needed at closing.

We also do proration adjustments through the day of closing including the real estate taxes and assessments between the parties.  When we meet, we go through all of the documents for signing and soon, you are done!  Simple!