The Big Day!
The big day is here! Tonight you can pop open the champagne, but today there will
be a lot of paper signing and a poignant passing of the keys (don't forget the garage
keys and electric door opener, too).
At the settlement there will be an attorney or title company representative (chosen
by the buyers), all buyers, listing and selling brokers, and all owners. The home
seller should bring all warranties on equipment and any instructions on equipment
maintenance or operation.
The attorney will have searched the title, provided title insurance, and obtained
old and new lender instructions. First, all unresolved walk-through deficiencies
are resolved.
With the buyer, the attorney explains the deed of trust or mortgage; the deed of
trust note or mortgage note; VA, FHA, or lender forms; and settlement sheets. Buyer
signs all these and pays the balance of the down payment and buyer's closing costs
with cashier or certified check.
Open Look At Closing Costs
"Closing costs" have lost much of their mystery in recent years.
Under the Real Estate Settlement Procedure Act (RESPA), the homebuyer is furnished
an estimate of closing costs by the lender, in advance of the closing. In some cases,
some of the closing costs may be paid by the seller; this is particularly true for
new housing, where the seller is the builder.
Settlement fees vary widely depending on price, location, and other factors, but
overall the buyer's costs usually average between 3% and 7% of the sales price.
Items that are usually included in the settlement fees are the loan origination
fee, mortgage insurance premium (M.I.P.), attorney fees, owner and lender title
insurance, recording fees, county tax stamps, state tax stamps, and the survey fee.
In addition, the lender will require an appraisal fee and a credit report fee in
advance of the closing.
A few other items, not required to be listed under the law, may also have to be
paid at a closing. These include advance deposits held in escrow for real estate
property taxes and insurance. The lender collects a portion of these every month
and then pays the insurance and taxes when they are due.
Because specific closing costs vary from area to area, and transaction to transaction,
we encourage you to consult with your
Long & Foster Sales Associate. Sometimes closing costs can amount
to a sizable sum. Remember that some of the items are tax deductible. Check with
your tax advisor.
Signing On The Dotted Line
With the seller, the attorney explains the settlement sheets and gets the home seller's
signature on them and the deed. Seller pays appropriate closing costs.
If the seller's taxes or insurance have been escrowed, the seller will receive any
money accumulated in the account for bills not yet due. Additionally, the seller
will be reimbursed for any money paid in advance and not used, such as property
taxes. The seller will receive these refunds at or after settlement, depending on
the area. Taxes and homeowners association dues or condominium fees will be prorated
on a daily basis. Seller, buyer, and brokers are supplied a copy of settlement sheets
for their records.
The house keys are passed. You are now the proud owner! Congratulations!