Once a home has been sold there is interim period until settlement. During this time a purchaser secures financing, and actions required by the contract, such as a termite inspection or repairs, are completed.
In the Washington area, the selection of a settlement provider, either an attorney or title company, is generally made by the purchasers. It is important to understand that while the purchasers may select and hire the settlement provider, that individual or firm is not an employe of the buyers. Instead, the settlement provider is an "agent of the settlement process" and performs services for both the buyer and seller, potentially collecting fees from each.
A settlement is an accounting that shows how all funds from a real estate sale have been disbursed. Various forms such as deeds and mortgages are also completed.
Although the settlement process must follow the terms of the sales contract, there is a possibilty of last-minute flexibility.
In one case, a contract called for certain repairs to be made by a seller. At the pre-settlement inspection of the property the purchaser saw that the repairs had been made. A clause in the contract requiring the establishment of an escrow fund to assure that the work would be completed was then dropped at settlement by mutual agreement.
Sometimes, however, settlements are not so compatible. Frequently there is some dispute concerning the condition of the property or an item that was thought to convey. In situations where the contract is vague, settlements are often protracted.
In some cases the settlement is so neutral that when a dispute arises the buyers and sellers are left to resolve the problem by themselves.
In one situation, a settlement provider did not suggest the establishment of an escrow fund to guarantee the completion of a new home. After settlement, the purchaser and builder argued for months. In still another case, a settlement sheet contained serveral financial errors that had to be resolved after the settlement was completed.