Put this lesson to work
Use what you learned to review current opportunities, or ask a property-specific question before you make a decision.
A common buyer question
One of the most common questions I hear is: “How do I know everything is done legally and that I'm protected?”
We use a professional title company to coordinate the closing. Think of the title company and escrow holder as neutral parties that follow the written instructions of the buyer and seller.
The title and escrow company handles the closing
- Prepares or coordinates the closing documents.
- Prepares the Promissory Note and Deed of Trust.
- Receives and disburses funds according to the escrow instructions.
- Records the appropriate documents with the county.
- Transfers ownership after the closing requirements have been met.
The Promissory Note
The Promissory Note states the amount owed, interest rate, payment amount, payment schedule, maturity or balloon date and other repayment terms.
The Deed of Trust
The Deed of Trust secures the buyer's promise to pay with the property. It is normally recorded in the county records as part of the closing.
Title
Buyers generally receive an owner's title policy. It is normally a one-time premium paid at closing rather than a monthly payment. Coverage is subject to the policy's terms, conditions and exceptions.
Closing costs
Escrow fees, title , recording charges, taxes and other closing costs should be stated in the escrow instructions or settlement statement. On many of our transactions, buyer and seller split certain title and escrow fees, but the actual allocation must be confirmed for each sale.
Ken's Tip
Take the time to read every document before closing and ask questions about anything you don't understand. A good title and escrow company will walk you through the process, explain the documents being signed, and make sure everything is handled according to the written escrow instructions.
From My Experience
Everything in Land University is based on what I've learned over many years of buying, selling, developing and researching land in Northern California.
My goal is to help you understand the questions to ask and the issues to investigate before buying land. Every property is different, laws change and county requirements can vary.
I'm not an attorney, licensed land surveyor, engineer or county official. These lessons are practical education based on my experience, not legal, engineering, surveying or tax advice.
Please verify important information with the appropriate county departments and consult an attorney, licensed surveyor, engineer, CPA or other qualified professional when needed.
— Ken Grisham