WHAT IS A SETTLEMENT
A settlement is a "closing" on a particular real estate transaction. At Avenue Title Group our job is to take a confusing and frustrating process and make it easy for all parties involved. To do this we rely on our knowledge of real property laws, our contacts in the various offices of the Recorders of Deeds, Courts, and Surveyors' offices, and the information provided by the parties to the transaction. Our closings are conducted by attorneys, but the attorneys do not usually represent the Buyer, Seller, lender, real estate brokerages, or any party to the transaction.
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 to us by facsimile to (202) 296-8146 (or (215) 257-4108 for PA property) for review. Upon our receipt we will order a title report, survey (if a single-family house), certificate of property insurance, payoff letter for the sellers' loan (if any), and all other information and documents needed for our underwriter to be able to insure the buyers' new title to the property. This process takes roughly one week to complete, and the information gathered is often incomplete or inconsistent, requiring further inquiries and conversations with our staff. Please be patient; land records and other data are often out of date, further underscoring the need for owners' title insurance to protect buyers. At the same time, buyers will also normally make application for a purchase-money mortgage and will be asked by their lender to pay to their lender the up-front costs for an appraisal of the property ($300) and a credit report on each buyer ($50). Each jurisdiction has its own set of recording fees and costs. Please review the cost calculator for your jurisdiction.
Once the Sellers' title is reviewed and found to be insurable by my title insurance underwriter, the survey approved by us, and the buyers' loan approved, we will be in touch with the buyers (or their real estate agents) to arrange a convenient time for the closing. Often the sales contract will specify an exact time and 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. Closings are ideally held in our conference room where last minute details can be most easily accommodated, although using our dedicated internet server we can close your deal at any location on which the parties agree.
On the morning of the day chosen for closing, the buyers customarily do a "walk-through" inspection of the property, noting any unfulfilled contract items (e.g. the chandelier was to convey, but is missing). Buyers then review our draft of the "HUD-1" settlement statement and obtain a certified check from their bank or credit union payable to "Avenue Settlement Corporation" for the exact amount needed to close the deal. If the check exceeds what is due at the table, we cut a check back to the buyers, or conversely take their personal check for any minor additions. At the table we collect the buyers' money, prepare, have signed, and transfer the deed and related affidavits from the seller to the buyer, pay all brokerage commissions, taxes, liens, recording fees and other charges, and the next day record the buyers' new deed. We also adjust to the day of closing the real estate taxes, condominium assessments, rents and security deposits (if any) between the parties. We then release the balance of the sellers' proceeds to them, and issue the owners' and lenders' title insurance policies. Simple!
Be sure to review the checklists on our site for more particular information depending upon your role in the transaction.