Few days are more gratifying for homebuyers – and their agents – than closing day, when the last of the paperwork has passed muster and the keys to the house change hands. But while the sentiments are the same no matter where you live, the process itself may be different. Unlike the ‘settlement’ system in some states, for example, California defines ‘closing’ not as the date when borrowers sign the final loan documents, but as the date and time the deed is recorded.

A consummation date recognizes the date the borrower becomes legally obligated to the loan – and a Closing Disclosure statement is given to said borrower at least three days before they are scheduled to sign loan documents. While at this point, the borrowers no longer have the right to rescind the purchase agreement, they may take up to three additional days to review and approve the terms and costs of the loan – and/or to rescind the loan if any of the terms have changed.

In most cases, three days after delivery of the Closing Disclosure, the loan documents are, in fact, signed. Still, the closing process itself unfolds in three very separate steps:

• Signing – The date when loan documents are signed and notarized
• Funding – The date the lender releases funds to the title company
• Recording – This is the date – the true ‘closing of escrow,’ when the deed and any other recordable documents are recorded with the County

Only after the escrow company receives confirmation from the title company that the documents have been recorded does the escrow officer verify all the charges and issue net proceeds to the seller and distribute funds to any appropriate parties.

In other words, the moment the Grant Deed is time-stamped by the County Clerk is the moment the property actually changes hands – and only then may the new owners receive the keys.

In California, as elsewhere, the pathway to that happy moment – including a thorough title search – can be complicated. We are committed to making it as straightforward and trouble-free as possible.

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