Lee R. Schroeder | The Lima News
In the context of real estate, a common word that is mentioned is “closing”. Closing is technically the literal place and time where the sale and purchase of real estate is finalized with the seller getting money and the buyer getting the deed to the property, often along with possession of the property. Business transactions where money and property, including businesses, are exchanged are also called “closings”, but most people experience closings in the context of real estate.
Real estate is valuable, and the money involved in real estate is usually large. Thus, the seller may not want to sign the deed to property and give that deed to the buyer until the seller has the money. In turn, the buyer may not want to pay the money until the buyer has received the signed deed to the property.
Having a closing, with a third-party closing agent as the facilitator, protects both buyers and sellers. A closing agent will take possession of the seller’s signed deed to property and the buyer’s purchase money and only provide the other party with the sought-after items once both parties have provided their respective money or signed deed.
There are traditionally two types of closings. Roundtable closings are events where the buyer and the seller are literally in the same place at the same time when the purchase money and deed are exchanged. Sometimes, the buyer and seller may be in the same room, but other times the buyer and the seller are in different rooms in the same building.
In contrast, escrow closings occur after the buyer and seller provide all of their documents and money to the closing agent in advance, and the closing agent waits until a date-certain to exchange the money and deed. Escrow closings continue to become more common due to their convenience and flexibility. Escrow closings are particularly sought after and valuable when a transaction includes multiple sellers and/or multiple buyers. Everybody providing their documents or money separately allows for people to provide their money or deed (and sign other appropriate documents) when it is most convenient for them.
Decades ago, closings were almost always roundtable closings. Sometimes, the closing agent would buy food and drink for the buyer and seller once the transaction was completed. Thus, the lack of a closing meal or party for escrow closings meant that people sometimes called escrow closings “dry” closings due to the lack of adult beverages provided at the closing’s conclusion.
Most closing agents no longer host “closing parties,” but some closing agents — like my law firm and title agency — will do so if appropriate.
Closing agents are often the same people who do title examinations of the property prior to closing. Closing agents are also usually responsible for any post-closing filing, like the public recording that is required for deeds to property.
The use of a closing agent avoids mistrust and inconvenience of buyers holding out until they have the deed and sellers holding out until they have the money.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
