I frequently get asked, “When do I get my keys?” After the buyer has gone through all of the rigamarole of inspections, removing contingencies, getting all of the last minute paperwork into the bank so that the underwriter will sign off on the loan, it’s time to go to the title company to sign the paperwork. Most buyers will assume that they get their keys shortly after they’ve signed.
As Lee Corso would say, “Not so fast, my friends.”
There are three important hurdles after signing at the title company: The title company and the lender have to make sure that all of their numbers match up; the title company has to receive the wire from the bank; the title company has to go to the county registrar’s office to record a new deed of trust.
Conditions: Usually, the first hurdle has been worked out between the title company and the bank by the time everything has been signed. Once in a while there are a few kinks (i.e. conditions) that need to be ironed out. This is usually handled fairly quickly but it can drag. I sold a listing a few years ago where the bank and title company had several issues and it extended closing by a couple of days…it was a stressful time for everybody involved, particularly the poor buyers. It did get worked out eventually and ultimately everyone was happy.
Wiring vs. funding: Often times we will use these two words interchangeably, but there different. There is often a couple of hours lag between when the bank has sent the wire and when the title company receives it. This is why it is difficult to sign the title paperwork and close escrow on the same day. Some lenders, like Veterans United, are able to wire the money ahead of the signing, but this is rare largely because the lender has to review the documents that the buyer has signed to make sure that there aren’t any mistakes. Once the wire has been received by the title company, the escrow officer will let the parties know that the loan has funded. Once funded, the escrow officer can then begin processing the paperwork to send to the county.
Recording: Close of escrow doesn’t happen until all of the above paperwork and funding has occurred and the title company has submitted a new deed of trust to the county. There is a process for recording at the county registrar’s office, it’s not necessarily a first-come-first-serve basis. Each title company is allotted a certain number of slots for recording. Not all slots are used for home sales, however, as there are refinances, changes in a deed of trust, etc., that also need to be submitted to the county. Recordings are usually batched into a morning and an afternoon group. Once the county confirms receipt of the change of title, then the escrow officer will let the parties know that the sale is on record and now you can go get your keys.
There are a lot of moving parts in any transaction and it takes a measured hand and expert project manager to make sure that everything runs smoothly from the beginning to the end.