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What to Expect at a Real Estate Closing:What to Expect at a Real Estate Closing:
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Please allow adequate time for your closing. A normal real estate closing
when a loan is involved will take about an hour.
You will need some form of photo I.D., preferably a driver’s license.
The Notary will need to see your identification in order to notarize documents.
Funds for closing are required by law to be certified. Certified funds
can only be obtained from a bank or credit union; brokerage firms cannot issue
certified funds.
You may wire funds into our account if you prefer. Please inform your
closing agent of your intentions and they will instruct you accordingly.
We will make every possible effort to complete your Settlement Statement
at least 24 hours before the closing so that all parties have a chance to review
their charges. However, we cannot complete the Buyer’s figures unless
we have been given instructions and approval by the lender.
We can normally complete the Seller’s Settlement Statement well in advance of
the closing; call your closer if you need the figures sooner than the day before
closing.
The following is a list of the most common documents that the Seller will
be required to sign at closing:
1. The Settlement Statement (also called "HUD - 1"): Itemizes the fees
paid by both the Buyer and the Seller and gives the bottom line figure due to/from
each party.
2. Closing Affidavit : A statement certifying that the Seller is the true
and lawful owner of the property, that there are no liens against the property
other than those disclosed, and that there are no other matters which would
adversely affect title to the property. This affidavit also includes acknowledgment
by the Seller that taxes have been prorated between the parties using the best
available information. If when the actual tax bills are released, the amount
differs, then there will be a recalculation of the tax proration.
3. Compliance Agreement: An agreement to be executed by both parties
regarding typographical errors and any additional requirements to be met after
closing.
4. Warranty Deed: The document which is recorded in the Public Records
and transfers legal ownership of the property.
5. 1099-S Exemption Form: States that the criteria exempting the requirement
for reporting to the IRS have been met; if this is not the case, a 1099-S form
will be issued. Please note: each transaction is different, and as such, additional
documentation may be required.
The following is a list of documents generated by the Title Company that
the Buyer will generally be required to sign.
1. The Settlement Statement (also called, "HUD - 1"): Itemizes the fees paid
by both the Buyer and the Seller and gives the bottom line figure due to each
party.
2. Compliance Agreement:: An agreement to be executed by both parties regarding
typographical errors and any additional requirements to be met after closing.
Each Lender will have different documents for the Buyer to sign; however,
almost all residential loan packages will contain the following:
1. Note: The promise of the Borrower to repay the loan, and the basic terms
of the repayment.
2. Mortgage: The document which is recorded in the Public Records granting
the lender a lien on the property to secure the loan. This document gives the
lender the right to foreclose if the Borrower defaults on the Note.
3. Truth-In-Lending Statement: A required disclosure to the Borrower stating
the annual percentage rate (this rate contains the fees charged by the lender
and adds them to the note rate) and the total cost of the loan over its life.
4. Anti-Coercion Statement: An acknowledgment from the Borrower that the
lender did not require the homeowner's insurance to be purchased from a particular
company.
5. IRS Forms W-9 and 4506: The W-9 enables the lender to report the interest
paid annually to the IRS; the 4506 is used in the event of an audit by HUD and
allows the lender to obtain copies of tax returns directly from the IRS.
6. Payment Letter: Gives the amount and due date of the first payment.
7. RESPA Servicing Disclosure: Discloses to the Borrower that the lender
has the right to transfer the loan on the secondary market.
8. HUD - 1 Addendum: A statement that the HUD - 1 Settlement Statement is
a true, accurate, and complete statement of the transaction.
9. Loan Application: A typed copy of the Borrower's Loan Application
10. Correction Agreement: An agreement by the Borrower to correct clerical
or typographical errors.
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