Today our topic is the closing process in California. In many parts of the country it’s quite different, there’s a closing process where actually the buyer and the seller and each of their attorneys meet around a table and actually go through and prorate all the expenses and take care of all the funds, et-cetera, all at one time, and that’s the actual closing date.
In those areas of the country, mainly on the East coast, attorneys are involved in the contract and they’re involved in the closing on terms of looking over title research and handling prorations, et-cetera. In California and many western states it’s the title company that assumes that responsibility. The title company handles all of the prorations, all the collecting of funds, all the disbursement of funds, and payment of all the outstanding liens against the property.
We don’t normally use attorneys in California, that does not preclude you as a buyer or seller from engaging with an attorney certainly, but they’re not a normal part of the closing process here. In California, both parties sign their respective closing statements prior to the actual close date. Usually two, three days before we close the parties sign their closing documents. Then when it comes to closing the actual escrow, in California it’s the title company that records the deed. When they record that deed, the ownership transfers to the buyer and that’s the actual closing date.
There’s nothing required of either party on close of escrow day, it’s the title company that records the deeds. Why do we sign them separately? Probably because in California the buyer and seller most of the time will want to kill each other so good to keep them separated. The title company’s role is to collect all the documents, to do all the title research, to issue a preliminary title report, which shows all the liens against the property, to collect all the payoffs for any outstanding liens against the property, collect the buyer’s funds, the lender’s funds, and then disperse and pay off all the liens and record the deed, that’s what the title company does.
Again, in California, when we say the property’s closed, what that means is the deed has been recorded. That’s the difference for closing a transaction in California versus some other areas of the country.