Documents That Need Title Company Review Before Closing Day

Why Documents Need Review Before Closing

When preparing for a real estate closing, certain documents need advance review by the title company. The review process addresses three fundamental questions that must be answered before any property can change hands.

Who has the authority to sell this property?

Your title company must confirm that the people signing documents and selling the property are legally authorized to do so. For example, when a property is held in trust, the trust documents must be reviewed to verify that the trustee has the authority to sell and who specifically needs to sign. Without this verification, you might discover at closing that additional signatures are required or that the seller lacks proper authorization.

Are all legal requirements met for this property to be sold?

Each transaction has unique legal requirements that must be satisfied before closing. For instance, if a property seller has passed away, the title company needs to review the death certificate and possibly a will or probate documents to determine the proper chain of ownership. This review might reveal that additional heirs must consent to the sale or that an estate needs to be probated first.

Are all of the property details accurate?

Document review ensures the property being sold matches what's in the contract. When a survey is submitted, title professionals verify that it describes the correct property. This is particularly important for rural properties or parcels being divided.

For example, a seller might own multiple adjacent lots but intend to sell only one. Without reviewing the survey beforehand, the wrong property description could be used in closing documents, causing significant delays or legal complications.

Early document review gives your title company time to identify and address these requirements before your closing date, preventing last-minute delays.

Types of Documents That Need Review Before Closing

Several types of documents require title company review well before closing day. Understanding what they are and why they need review can help you prepare for a smooth closing experience.

Power of Attorney

A power of attorney (POA) is a legal document that allows someone (the "agent" or "attorney-in-fact") to act on behalf of another person (the "principal"). For real estate transactions, the POA must specifically grant authority to buy, sell, or mortgage property.

Title companies need to review POAs to verify that they grant proper authority for real estate transactions and meet state legal requirements. Both the title company and the lender (if financing is involved) must approve the POA before closing. This pre-approval process allows time to address any issues with the document, such as missing notarization or improper language.

The original POA document must be brought to closing, not just a copy. This is one of the few documents that requires the original. Attempting to use a POA at closing without prior approval will almost certainly delay your closing.

Death Certificates

Death certificates need review when a property owner has passed away. This typically comes up when only one person from a couple is signing the contract despite two names appearing on the title.

The death certificate serves as verification of why one party is absent from the transaction. However, submitting a death certificate is usually just the first step in a longer process. The title company will examine the death certificate to determine what additional documents may be required based on how the property was titled.

A common misconception is that property automatically transfers to a surviving spouse. In reality, even if the property was inherited from a spouse, the title company may still need to see a will and possibly probate documents. If the deceased was the only person on the title and their children are selling the property, the title company will need to verify who legally inherited the rights to sell.

Unlike POAs, a copy of the death certificate is generally acceptable for review rather than the original.

Trust Documents

Trust documents come into play when property is held in a trust, which is a legal arrangement where property is held by one party (the trustee) for the benefit of another (the beneficiary). Many homeowners place their property in trusts for estate planning purposes.

Title companies need to review trust documents to verify who has the authority to sign on behalf of the trust and ensure the trust allows for the sale or purchase of property. Some trusts require multiple trustees to sign documents, while others may have restrictions that affect the transaction.

When submitting trust documents, you only need to provide the relevant pages that discuss real property transactions - the entire trust document isn't necessary. A copy is also sufficient. At closing, the parties will sign a separate recordable document that contains the necessary information without the personal details included in the full trust.

Interestingly, some property owners forget they've placed their property in a trust. In these cases, the title search will reveal this information, prompting the title company to request trust documents.

Wills

Wills become relevant in transactions involving deceased property owners. A will is a legal document expressing how a person wants their property distributed after death.

Title companies review wills to determine who legally inherited the property and can therefore sell it. This verification ensures all legal heirs are properly represented in the transaction. Wills are typically requested after a death certificate has been reviewed.

The review may reveal additional heirs who need to be involved in the transaction. In some cases, probate documents may also be required if the estate went through the probate process. A copy of the will is acceptable for review purposes.

Transactions involving wills and estates often take longer to close due to their complexity and the potential need for additional documentation. Agents and buyers should be prepared for potentially extended timelines when dealing with estate sales.

Divorce Decrees

A divorce decree is the court order finalizing the divorce and division of assets. Divorce decrees need review when property was jointly owned by a married couple, and now only one former spouse is selling the property.

Title companies review divorce decrees to understand why only one person is signing when two people are on the title. The decree details how property ownership was legally divided and outlines any specific requirements for property sale.

In some cases, the decree may require an ex-spouse to sign a deed or attend closing, even if they no longer have an ownership interest. It could also specify how proceeds should be split or require additional documentation.

A copy of the divorce decree is acceptable for review. As with other documents, providing the divorce decree early in the process allows the title company to determine what additional steps may be needed before closing.

Surveys

A survey is a detailed drawing showing property boundaries and features. Surveys are particularly important for rural properties, land divisions, or when combining multiple parcels.

Title companies need to review surveys to ensure they have the correct property description for title documents. This is critical when dividing or combining properties, as the survey shows exactly what land is being transferred. The survey helps identify potential boundary issues and is necessary for creating accurate closing documents.

Last-minute survey changes can significantly delay closing. If you're parceling off pieces of land or combining properties, the title company needs to see the survey as early as possible. Without the survey, the title company won't know about property divisions or combinations, which could result in searching the wrong property or missing portions of the property being sold.

Surveys are especially important for rural properties where addresses may not clearly identify exact parcels. In some cases, the title search itself may require a survey if there are concerns about the legal description or potential encroachments.

Unlike most other documents requiring review, surveys directly impact what property is being transferred rather than who has the authority to transfer it.

Tips for Document Review

The document review process works best when you're proactive and communicate early with your title company. Here are some practical tips to help ensure a smooth closing:

• Ask the right questions early. One simple question can uncover many potential issues: "Will everyone on the title be at closing?" If the answer is no, this immediately signals that additional documentation may be needed, whether it's a power of attorney, death certificate, or divorce decree. Asking this question at the listing stage gives everyone more time to prepare.
• Complete the title company questionnaire. At South Oak, we give all clients a detailed questionnaire when an order is placed. This form asks about marital status, potential travel plans, and other factors that might affect closing. Encourage your clients to complete this form promptly and thoroughly—it's designed to identify issues early in the process.
• Communicate special situations immediately. If you know a property is being surveyed, is in a trust, or involves an estate, let the title company know right away. Don't wait for them to discover these situations through their normal processes.
• Consider a preliminary title search. For potentially complex transactions, like inherited properties or situations where the sellers aren't sure who's on the title, consider requesting a preliminary title search. This early look can identify issues before the property even goes under contract, giving you time to address them.
• Prepare for the domino effect. Remember that submitting one document often leads to requests for additional information. When you provide a death certificate, for example, don't be surprised if the title company then asks for a will or probate documents. This is normal and necessary to establish a clear chain of title.
  
• Send documents with the contract. The best time to submit documents for review is when you send in the contract. This gives the title company the maximum amount of time to review them and request any additional documentation.
• Avoid assumptions about property transfer. Common misconceptions can lead to closing delays. Property doesn't automatically transfer to a spouse upon death, and divorce doesn't automatically remove someone from a title. Let the title company determine what's legally required rather than making assumptions.
• Set realistic expectations. Help your clients understand that certain situations—particularly estates, trusts, or property divisions—may take longer to close. Setting realistic expectations from the beginning helps prevent frustration later in the process.

Document review plays an important role in creating a smooth, legally sound real estate transaction. By understanding which documents need review and submitting them early, you can prevent delays and complications that might otherwise surface at closing. This simple step helps ensure everyone arrives at the closing table ready to complete the transaction without unexpected issues.

South Oak's team is ready to guide you through the document review process, answering questions and providing clear direction on what's needed for your specific transaction. Contact your local South Oak office to discuss any document concerns or to request a preliminary title search for complex situations.