Checking The Pulse Of The Kansas City Real Estate Market

Despite the preparation we go through to get home buyers comfortable for their real estate closing, I often see the anxiousness in many buyer’s eyes as we head towards closing. I know that with any big life decision, there’s the concern of whether something is being overlooked. When I’m preparing for a flight out-of-town, a whole lot is running through my head right until take-off. So I can certainly understand buyers being concerned about whether all the i’s are dotted and the t’s are crossed.

This doesn’t just apply to first time home buyers either. Every real estate transaction is different and it’s important that both home buyers and home sellers alike make sure their real estate closings are ready to go off without a hitch. Fortunately, real estate closings are very similar in both Kansas and Missouri. Being licensed in both states means I have to be prepared for some slight differences in how closings occur on opposite sides of the state line but, overall, most buyers hardly notice the difference.

The first thing to know about a closing is that the buyer’s lender will seemingly handle 90% of the buyer getting ready for their closing. The title company – in additional to providing a title search and guaranteeing clear title to the property – will seemingly handle 90% of the  seller getting ready for their closing. But in actuality, both the lender and the title company have to work in concert to get everything ready to go and in producing the HUD Settlement Statement. The HUD is the document where both the buyer and seller can see all the final figures of the real estate transaction neatly on one document.

If the lender doesn’t get the final loan figures to the title company until the last-minute, that keeps the title company from being able to get the HUD Settlement Statement to the seller for review at least a day prior to closing.  It’s never ideal for either a buyer or seller to be sitting at the closing table and reviewing the HUD Settlement Statement for the first time. If that does happen and there’s an error, I’ve had to sit with a client for hours while the issue is handled.

On Kansas City closings I’m involved with, the title company providing the title insurance on a property handles the vast majority of the closings on those transactions as well. Most of the rest occur at the lender’s office. All lenders could close their own loans, but most prefer to turn the closing process over to the title company. Title companies don’t mind it because it’s an additional revenue center for them. Most of them also do a very good job of going over the closing documents with both buyer and seller.

A common misconception is that the buyer and seller show up at the same place at the same time to sign the closing documents. That rarely occurs and in most cases the home buyer never even meets the home seller. The real estate agents in the transaction communicate often and help to facilitate a smooth transaction. The timing of the buyer’s and seller’s closings is also often misunderstood. The typical real estate sale contract states the closing will occur on or BEFORE the close date written into the contract. The date written in is indeed the day that 99% of home buyers will sign their documents and the deal becomes official. But sellers can – and should – go ahead and sign their closing documents a day or two early. This helps to ensure that everything is ready to go for the buyer’s closing.

Most seller’s closings are pretty simple and many take less than a half hour. Buyer’s closings usually involve a lot of loan documents and lender requirements and a can take anywhere from one to two hours to complete. Before a buyer is done with their closing, they’ll probably have signed the HUD Settlement Statement, a Warranty Deed, a Truth In Lending Statement, a Proration of property taxes agreement, a monthly mortgage payment letter, the loan Note which is the borrowers “guarantee” to pay the loan, a warranty deed, the mortgage which is what places a lien on your home and keeps you from selling it outright, and no doubt a few others documents too.

Posted by Jason A. Brown