Closing Day

Typically, the closing is a formal meeting where the buyer or company/organization representative, seller, real estate agents, and representatives from the lender and title companies meet to complete the sale and financing transaction. Bring your attorney to review the documents before signing them. Documents to be signed include:

• The Note: The business’ promise to pay the lender according to the terms specified in the mortgage. It spells out all specifics regarding mortgage repayment, including payment dates and penalties for falling behind.
  
• The Mortgage or Deed of Trust: This legal document secures the note and gives the lender a claim against the space if the loan goes into default. In other words, the mortgage gives the lender partial ownership in the property until the loan has been paid in full. It outlines the borrower’s responsibilities to pay principal, interest, taxes and insurance on schedule; to maintain homeowner’s (hazard) insurance on the property at all times; and to keep the space properly maintained.
  
  If the business/organization violates these terms of agreement, the mortgage contract gives the lender the right to foreclose on the property. The lender can legally seize and sell the property, and use the proceeds to pay off outstanding loans and any costs it incurred while pursuing the foreclosure. The business/organization will receive any remaining funds after all bills to the lender and others (i.e. property taxes, mechanic liens, etc.) have been paid.
  
• The Deed: This document transfers ownership of the property from the seller to the business.
  
• Inter-creditor Agreement: This document is needed when multiple lenders co-fund a project. The agreement stipulates the process and procedures to be followed in managing the loan, such as which lender gets paid first in the event of default.
  
• Guaranty: This document is needed if the organization's executive director or board members personally guarantee the loan.
  
• Other Documents: Depending on the type of loan you have, or the program you use, you might have to sign other documents required by state law, the lender or other parties. Read all documents carefully before you sign them.

Now that all the documents have been signed, and the keys have been handed over, welcome to the wonderful world of property ownership!