It depends on the type of real estate closing. There are two types of closing — there is the roundtable closing and there is the escrow closing. It depends on what is the custom in your area. Central Ohio does a roundtable closing; Cleveland usually does an escrow closing.
A roundtable closing is an actual event that people go to where everyone sits around a roundtable and the deed is executed, the money is exchanged and the mortgage is signed. All the documentation related to the actual transfer of title occurs right there at the closing.
Escrow closing is different. The deed might come to the closing officer at one time; the money might come to the closing officer another time. The people don’t really physically show up. Once everything is gathered, then the deed is recorded, the money is dispersed and the transaction is over.
Q: Are there issues with roundtable closings that aren’t in escrow closings?
One of the issues related to a roundtable closing is the fact that the deed is executed at the closing table. Then, the money is dispersed, but the deed has not gone to the courthouse to be recorded yet. We call that the “gap,” and there is a risk in that gap that an issue might crop up between the time the deed is signed, the money is dispersed and the deed gets recorded.
As lawyers representing the buyer, we will ask the title company to insure the gap — meaning that if issues crop up, the insurance company will insure against it.
A buyer doing this on his or her own would not even think about or have knowledge of this. Many lawyers don’t ask to have that gap insured. We have had enough of these and we have seen issues crop up during that gap, so we avoid those problems and the title companies are willing to accept our request.
Q: How long is the gap?
I have seen the gap go for days and sometimes weeks when the title company does not get the deed down to the courthouse promptly. I have seen instances where the title company has a problem recording the deed, and it took over a month to get the deed recorded because there is some issue that existed between the deed and the recorder. The good news was, we were insured through the gap so if anything cropped up during that period of time, my client was insured.
Learn more about real estate in Columbus, Ohio.