What Do You Need to Know About Closing on a House
When you have located, evaluated and negotiated a great property deal, attorneys will usually prepare all necessary documents for your closing. If you are like most buyers, you don’t really know much about these documents or how they are presented. The basic assumption that I am making is: the buyer assumes that everything is in good order once the contract has been executed. That’s not necessarily the case. You need to review what happens at closing and determine who is responsible for what. The main players at closing are the buyer, the seller and the closing agent or the real estate attorney.
First of all, the seller and the buyer must come to an agreement about what the closing costs will be. Once that is done they will draft a document called the HUD-1 settlement statement. This statement shall be lodged with theingly filed U.S. Federal grand lodgement title deed and their two most recent comparable sale stubs showing the actual price of the property recently sold.
It is important that the real estate attorney read over the HUD-1 and ensure that all charges due are itemized and that you are also Charge Back the possession of the house and all its contents that you rightfully own along with payment of actual funds you initiated at the signing of the contract. Many times we don’t read the document we bill back on, we just act upon the assumption that everything is in order and we really don’t read or understand the document presented to us. We do this on the assumption that the seller’s attorney has accurately detailed in the original documentation and recites what was already discussed. This is an illegal practice because if all the terms have been disclosed and agreed upon in the contract, there are really no excuses for the parties to pull out of a contract upon signing because it has not been read. The seller and buyer have both signed an enforceable contract that stands on its own.
Once the contract is signed the seller presents the real estate attorney with your signed contract and the buyer presents the offer. The details of the offer or contract shall be agreed upon by all parties. Once this is settled the attorney will want a check to be made to the seller for the balance of the purchase price, the balance of any down payment and most important, the seller’s earnest money deposit under all the agreements and conditions of the offer. More importantly, the seller must return a certified cheque to the buyer which is bank proof.
The buyer wants l dollars to close and the seller wants dollars to settle. The escrow fees vary from escrow company to escrow company but they are typically five per cent of the purchase price. They are non-refundable therefore they need to be included in the agreement if the buyer sets them aside. The escrow company office can tell you how much the earnest money deposits are and what other information you need.
This information together with the U.S. Department of Justice regulations will allow all parties to close your real estate contract with confidence. The information together with the required information that is required to introduce security to the property transaction is all that is required and no other extra paperwork is needed.