Are You Ready to Buy Land? Here's What You Need to Know About the Closing Date
One of the key steps in the process is the closing date, which is the date on which the sale of the land is finalized and the ownership is transferred from the seller to the buyer.
But what exactly happens on the closing date, and how long does the process take? Here's a look at what to expect.
The closing date is the final step in the land-buying process. It's when the buyer and seller meet to transfer ownership of the land and complete the sale. On the closing date, the buyer will typically pay the remaining balance of the purchase price, and the seller will transfer the deed to the property to the buyer.
The closing date can take place at a title company, attorney's office, or other location that has been agreed upon by both parties. Many Title companies and law offices can also perform remote closing. A remote closing, also known as a "virtual closing" or "e-closing," is a process where the closing of a real estate transaction takes place entirely online or through remote communication methods, such as video conferencing or electronic document signing. In a remote closing, the buyer, seller, and any other necessary parties, such as real estate agents and attorneys, participate in the closing process remotely, without the need for in-person meetings. This can include reviewing and signing closing documents electronically, as well as the transfer of funds and the recording of the transaction with the local government.
Remote closings have become increasingly popular in recent years, due to the convenience and flexibility they offer, as well as the ability to close a transaction in a timely manner, even during the pandemic.
The closing process can take anywhere from several days to multiple weeks, depending on the circumstances. The length of time can vary depending on factors such as the type of property, the availability of property documents, availability of financing, etc.
Before the closing date, the buyer will usually have to complete a number of tasks, such as obtaining financing, perform due diligence on the property (such as zoning, easements and restrictions, etc.), inspect the property, conduct a survey (if wished and not yet available), review any building codes and permit requirements, review the purchase contract. Ordering of a title search and getting title insurance will be usually managed by a Title Company taking care of the closing process. The buyer will also need to provide any necessary documentation, such as proof of identity.
It's important to note that title companies and law offices follow strict guidelines and regulations to ensure that all transactions are done correctly and legally. Here is a list of tasks a title company or law office handle before closing on a property:
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Will conduct a search of the property's title to make sure there are no outstanding liens or other issues that could prevent the sale from going through.
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Will offer additional services such as title insurance to protect buyers and lenders from financial loss due to title defects.
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Will prepare all of the necessary legal documents, including the purchase agreement, the deed, and any other documents required by state law.
- Will coordinate the closing, which will take place remotely, at their office or a neutral location agreed upon by both parties.
Before the closing, the title company or law office will send the settlement statement to the buyer. A settlement statement, also known as a HUD-1 statement or closing statement, is a document that itemizes all of the charges and credits that the buyer will incur during a real estate transaction. When buying vacant land, the settlement statement will typically include items such as the purchase price, any financing costs (such as mortgage origination fees or points), title search and insurance fees, and property taxes. It will also indicate how much money the buyer will need to bring to the closing in order to complete the transaction. It is important to review the settlement statement carefully before closing to ensure that all charges are accurate and that you understand any contingencies or contingencies on the land that you are buying.
On the day of closing, the buyer will need to bring a cashier's check or wire transfer to cover the remaining balance of the purchase price. The seller will provide the deed of the property and the title company or law office will handle the transfer of funds and transfer of ownership, ensuring that the purchase price is paid in full and that all necessary taxes and fees are paid.
Once the sale is complete, the title company or law office will record the deed with the local government, making the transfer of ownership official.
After the deed is recorded with the county, the new ownership of the property is officially recognized by the government and the public. The recorded deed serves as evidence of the transfer of ownership. In addition, the county will update its records to reflect the new ownership and will likely reassess the taxes which will be sent to the new owner.
It is important to keep the recorded copy of the deed in a safe place as it may be needed in future transactions.
The average closing duration for land can vary greatly depending on the specific circumstances of the transaction, such as the location of the property, the complexity of the sale, and the readiness of all parties involved. Typically, it takes around 30 to 45 days to close. However, it is not uncommon for it to take much longer, even several months or more, if there are issues that need to be resolved or if the parties involved are not able to move forward with the sale as quickly as they would like.
In conclusion, while buying land may seem like a straightforward process, there are a lot of behind-the-scenes tasks that need to be completed to make sure the transaction is legal and above board. A title company or law office plays a critical role in this process by handling all of the legal and administrative tasks associated with closing on a property. Working with a reputable title company or law office will ensure a smooth and successful transaction.
References:
https://www.nolo.com/legal-encyclopedia/closing-procedures-vacant-land-purchase.html
