Michigan License Law Practice Test

Who is responsible for preparing the closing documents in a real estate transaction?

1. Listing broker

2. Buyer's agent

3. Title company

4. Escrow officer

The correct answer is: Listing broker

In a real estate transaction, the correct party responsible for preparing the closing documents is typically the title company. The title company is tasked with ensuring all necessary paperwork is in order for the closing process, which includes preparing documents like the settlement statement and the deed. The listing broker, while they play a significant role in the transaction by representing the seller, is not typically involved in the preparation of closing documents. Their primary duties involve marketing the property and assisting in negotiations. The buyer's agent also assists the buyer in the transaction and communicates with the seller’s parties, but their main role is not to prepare the legal documentation but to represent the buyer's interests throughout the process. The escrow officer, meanwhile, oversees the escrow account and ensures all closing funds are appropriately handled, but they don’t usually prepare the closing documents either. Instead, they execute the escrow process, ensuring all conditions of the sale are met before the transaction is finalized. Given this context, the choice of the title company as the party responsible for preparing the closing documents is precisely aligned with industry practices.