Multiple people are involved in real estate sales transactions, especially on closing day. These people can roughly be divided into two categories - those who are directly involved in the sale and those who are neutral third parties helping to facilitate the transaction. Those who are directly involved include buyers, sellers and their real estate agents. Escrow agents, title agents and real estate attorneys are third parties who facilitate the legal transaction. Additionally, loan officers forward paperwork and funds from lenders for the settlement process.
Buyers, Sellers and Their Real Estate Agents
The buyers are the ones who are purchasing the property - in this case, Mike and Sally. Buyers typically use a real estate agent to assist them in finding and negotiating for property, as well as guiding them through the home buying process.
Sellers, such as Fred, own property and wish to sell it. Sellers often work with real estate agents to list a property for sale, negotiate the sale and provide advice on how to prepare and market the home to get top dollar for it. Fred's real estate agent has made a contract to transfer the deed to Mike and Sally in exchange for an agreed upon price.
Closing Agents
A closing agent insures that all steps of a settlement are completed. A closing agent may be an escrow agent or title agent. The closing agent prepares the final paperwork, collects the necessary signatures and records the information with the local government
An escrow agent is a neutral third party who accepts funds on behalf of buyers and sellers for disbursem*nt at closing. Sometimes a real estate attorney conducts the closing and functions as an escrow agent. (Mike and Sally, or Fred the seller, may feel more comfortable having a legal professional oversee the settlement process as closing can be a complex process involving a multitude of legal paperwork.)
A title agent offers research into the title status of the home and insurance services. Title agents insure that the seller is the legal owner of the property and there are no legal defects in the title which would prevent transfer to the buyer.
Loan Officer
For the purposes of closing, the loan officer is responsible for providing mortgage information and funds on behalf of a lender. As a representative of the lender, the loan officer sends the funds that Mike and Sally have taken out as a loan and gives them to the closing agent to complete the sale. The closing agent will also need the supporting documents giving details of the mortgage so that the title acknowledges the mortgage. Loan officers do not normally attend or conduct the closing process.
To unlock this lesson you must be a Study.com Member.
Create your account
