4d • General discussion
WHAT TAKES PLACE BEHIND THE SCENES WHEN CLOSING A REAL ESTATE TRANSACTION:
1. Attorney’s office receives the contract
2. We verify that the contract has been properly executed. Failure to properly execute
a contract can cause closing delays.
a. Common errors:
i. If there are multiple sellers all sellers must sign the contract.
Oftentimes we have a missing seller’s signature on the contract.
ii. If the buyer or seller is a company, they are not to sign the contract as their
individual name. They must sign on behalf of the company.
iii. If the seller is an estate, the executor or administrator must sign contract as
executor/administrator of the estate.
3. We gather specific information from buyer and seller. We send out an email with a buyer and
seller information sheet. If there is a delay in getting back the information sheets this can cause
the closing to be delayed.
a. It is important to have the seller information sheet filled out completely because this is
where the law firm gathers the information to order any mortgage payoffs, HOA closing
letters and clear liens that come up on title by verifying the social security number.
There are also sections that request information on whether the seller is deceased,
divorced or has filled for bankruptcy. These all can cause issues that can delay closing.
a. If seller is out of state seller, if they are receiving a profit, they will have to pay 3%
withholding taxes to the Georgia Department Revenue, unless exceptions apply. If they
are a foreign seller not only will they have to pay 3% in GA withholding taxes, but they
will have to pay 15% in FIRPTA taxes.
4. If the closing is a cash sale:
a. We order title once the buyer has made it through due diligence. The buyer is required to
pay the title search fee upfront.
b. Once the title comes back, we verify whether there are liens on the property.
c. If there are liens, we clear them.
i. How to clear a lien
a. We must perform all duties stated above when closing a cash transaction.
1. We get the sellers/buyer SSN from their information sheet and we call the
attorneys office who filled the lien to determine if the lien is against the
same person who we are doing a closing for. If the lien is a match, we
request a payoff. If the lien is not a match, we remove it from the title.
All verified liens must be paid at closing.
2. We order payoff information from any bank that the seller has
a current loan with.
3. We contact the water departments.
a. Many people do not know that the county water department can
place liens on homes when the water bill is not paid
4. We contact homeowners’ associations to make sure dues are current.
The seller is responsible for purchasing the HOA closing letter. These fees
can range from $100- $450.00. The HOA management company
determines the fees. The attorney’s office has nothing to do with the price
of the HOA closing letter.
5. If the buyer is using a lender to Purchase the property:
b. However, in addition we must send the lender paperwork showing that there are no liens
and if there are liens that they will be satisfied prior to closing. This is called a title
commitment that we send the lender. A title is not ordered on a financing transaction
until the lender sends over a request for our office to pull the title.
6. Once title has been cleared and we have received all payoff information, HOA closing letters,
water bills and all items contained in the contract such as home warranty’s and repair invoices,
at that time our office is ready to close the transaction.
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WHAT TAKES PLACE BEHIND THE SCENES WHEN CLOSING A REAL ESTATE TRANSACTION:
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