The term "closing" will come up many times throughout the building process and can mean different things at different times. For those getting a bank loan you may go through as many as three to four closings before the construction of your home is completed.
The bank refers to a different closing then the builder sometimes refers to. In addition, if you are buying property at the same time (or near the same time) as you are building a home that also will likely be referred to as a closing.
DEFINITION OF CLOSING IN REAL ESTATE - The final transfer of the ownership of a house from the seller to the buyer, which occurs after both have met all the terms of their contract and the deed has been recorded.
The term "closing" in construction simply put means the finalizing of the matters.
Where will it take place: At a title company or attorney's office.
What to bring: Drivers license or comparable photo identification, any required paperwork.
Who will be there: The closing agent, bank representative* and seller* *Not always are these parties at the closing. They may have sent the necessary papers prior to closing.
What will happen: You will be provided a "closing statement"; the closing agent will go through the statement and each of the papers with you prior to signing. At this time they will also provide you with a title policy on the deed in the amount of the purchase price. You will also receive a non-recorded copy of your warranty deed.
What is a closing statement?- "A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction." (Sources Noll.com "Law for All" )Resources Links
Where will it take place: Either at a title company or a the bank.
What to bring: Drivers license or comparable photo identification, any required paperwork.
Who will be there: The bank representative and builder representative* *Not always are these parties at the closing. They may have sent the necessary papers prior to closing.
What will happen: You will be provided a "closing statement"; the closing agent will go through this and each of the papers with you and you will signing.
Where will it take place: The bank or other location.
What to bring: Any required paperwork (e.g. certificate of occupancy)
Who will be there: The bank representative.
What will happen: The bank representative will go through any changes you might have made to the purchase agreement and make any modifications to the loan. This is one of the most crucial times for the builder as you will be completing your obligations with the bank and following the closing the bank will generally issue a final check to the builder for his last construction draw (payment). This payment represents the bulk of the builder's profit in the project.
Ask the bank to issue the last draw check in the name of the builder and your name(s). This way you will have final control of handing the money over to the builder at the "Builder's closing" (Closing on Construction).
Where will it take place: The builder's office or the home under construction. (Encourage it to take place at the home.)
What to bring: Any required paperwork and the finale draw check.
Who will be there: The builder representative. (In small companies the builder or a director in the company will generally be there.)
What will happen: The builder representative should go through the home with you and demonstrate and orientate how different systems work in the home. The builder and you will come up with a "punch out list" of items which still require completion or attention. The builder will provide you with a certificate of occupancy and a "master lien release" releasing you the owner from any mechanics liens on the home during construction or filed thereafter. (If you haven't read the Florida Lien Law section.)
Last Updated: August 06, 2005 09:02 PM
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