Understanding Real Estate Transactions

Dated: 06/21/2018

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When signing documents for a home sale or purchase, the numbers are figured to the penny and the signatures are scrutinized to the letter. Quite a volume and variety of paperwork is involved. Signatures and initials are required on deeds, disclosures, waivers, affidavits, notes, supplementary lender and title company documents, and other miscellaneous papers.

Real Estate closings involve getting “wet signatures.” That means papers are physically signed in ink, in person, by hand. Remember something called cursive writing? That’s what we’re talking about. Documents must be witnessed and signed by a notary as well.

Both buyers and sellers must sign in a very specific way. The seller’s signature must exactly match the legal name that the property is vested in. Buyer signatures must comply with their lender’s instructions.  Most signatures must match either the lender documents, the driver’s license, the recorded documents, or however the title company wants it.

If your name is John James Doe Jr., you may be asked to sign one document as John J Doe, another as John Doe Jr, or JJ Doe or J James Doe — there can be different variations of your name that require different signatures for the same closing.

In a typical transaction, the number of documents signed or initialed at closing by the seller often ranges between 10 and 25. For a buyer getting a mortgage loan, the number of signatures and initials required on closing day can be between 20 and 50. Those are just the signatures and initials needed at the closing table.

From the start of the transaction to the close of the deal, even more autographs are involved. The buyer will sign documents at the start of the loan process including the application, good faith estimates, and disclosures. Getting the property under contract requires signatures from both parties on the offer, responses, final contract, disclosures, representation agreements and various addendums.

It adds up before you even get to closing day. If there is a homeowner’s association involved or any special situations, more signatures are involved.

I had a closing this week with the out of state buyers using a Power of Attorney. Their mom was signing as the POA for both her daughter and son in law. Not many folks realize what a huge gift this was for this purchasing couple.

Signing as the Power of Attorney, this dear woman had to sign or initial on the dotted line with exact instructions from the new lender 109 times. Yep, we counted. For each signature line, she had to write the daughter’s name, her name, and write out “agent and attorney in fact.” And she had to do the same for the son-in-law’s signature lines. They were long ‘signatures’ x 109 times. I got writer’s cramp just watching it.

When you’re prepping to buy or sell a home, in addition to packing, you may need to brush up on your penmanship. Every I needs to be dotted and every T should be crossed. Get it wrong, miss a signature or forget an initial and you’ll be called back to the title company to fix it before the deal is done.

By Lydia Blair
Special Contributor

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