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Property: Closing

Closing  The point when the purchase contract is performed
Jx Split on How to Close
Many States  closing is supervised by an escrow agent
-escrow agent:
-neutral 3rd party who receives purchase prices, deed, mortgage, promissory
notes and any other documents needed to consummate the transaction
-when all the conditions in the contract have been satisfied 
-escrow agent distributes the fund and documents as directed by written
escrow instructions signed by parties
Other States  table closing
-the custom is to have a “table” closing where the buyer and seller meet under the
supervision of an attorney or other professional to sign and exchange the documents
needed to close the transaction
Typical Closing
(1) the buyer pays the purchase price to the seller and executes a mortgage and
promissory note for the lender
(2) the lender advances the loan funds
(3) the seller transfers title to the buyer by delivering a deed
-the deed and mortgage are then recorded in the public land use records
-title insurance policies are later issued to insure the lender’s mortgage and buyer’s title
Requirements of a Deed  Must Pass SOF
(1) Be in Writing
(2) Be Signed by the Grantor
(3) ID the grantor and the grantee
(4) Contain words of conveyance and
(5) Describe the Property
Other Forms of Deeds Where Delivery Issues Could Arise
(1) Death Escrow
most jxs  find an effective delivery if the grantor is unable to retrieve the deed
 like when the grantor gives a deed to his attorney and directs her to deliver
it to the grantee only when the grantor dies
(2) Beneficiary Deed/Transfer on Death Bed:
-allows an owner of real property to designate the beneficiaries she wants to receive the
property upon her death
-it is revocable by the grantor during her lifetime
-interest is automatically conveyed at time of death
 avoids probate b/c it is not part of the will
3) Revocable Deed
-deed that expressly provides that grantor can revoke the grant at any time in the future
-most jxs  upheld
-some courts hold  these deeds do not satisfy the delivery requirement b/c the
grantor has not relinquished control
-some jxs  view the conveyance as valid but the power to revoke is void
(1) Delivery
Effective Delivery
-in order to deliver a deed, the grantor must manifest by words or actions an intent
that the deed be immediately effective to transfer an interest in land to the
-there must be intent to relinquish dominion and control over the
-a court will attempt to ascertain the intent from
-the “four corners” of the deed itself, considering all
-if the ambiguity remains, extrinsic evidence will be examined 
statements and conduct of the grantor and grantee
-an effective delivery of a deed is made when
(1) a grantor delivers the deed to a 3rd person without a reservation of right
to recall it and instructs the 3rd person to deliver the deed to the grantee on
the grantor’s death
(2) “the donor manifests that the document is to be legally operative while
the donor is alive.”
-Conditional Delivery
-Majority  ignores the condition and vests absolute title in the grantee
-Minority  any condition prevents a valid delivery b/c delivery requires
that the grantor intended an immediate transfer of title
-Delivery to a 3rd Party:
-although a deed cannot be conditionally delivered directly to a grantee, it
may be conditionally delivered to a 3rd party
-Presumption of delivery can be demonstrated if
-in most states
(1) deed is recorded, or (2) grantee has physical possession of
-Presumption of non-delivery can be demonstrated if
-in other states  the absence of manual delivery  no delivery
-delivery is not usually a problem because delivery usually occurs through escrow
-Once the deed is validly delivered title immediately vests in the grantee.
(2) Acceptance
-a deed is only effective if it is delivered and accepted
-usually acceptance is presumed even if the grantee is unaware of the gift
-but a grantee might refuse to accept a deed
(3)ish Recordation
-not required to be valid
 but the prudent grantee will immediately record their deed in order to protect
this title against later claim