Closing Your Home
These articles give you an idea of what to expect from your Real Estate closing. Again, you could recite it by now, “this skinny information was compiled from various sources and is deemed reliable. While it is believed to be accurate, it can not be guaranteed. Consult your lender, accountant, attorney and other professionals as appropriate for their advice and opinions.”

One of the best things you can do to show your appreciation to any professional is to refer their services. If you are happy with the level of our service and your transaction, we would love for you to pass our names on to your friends and families.

Email SkinnyAgent.com to anyone you know interested in buying or selling a home. At their leisure, they can browse our site to get a better feel for us and the services we provide to our clients. We look forward to helping you and your friends with your next real estate closing!

Power of Attorney

All parties, (purchasers and sellers) whose names are on either the mortgage or deed must attend the closing of a property unless prior arrangements have been made to have a specific Power of Attorney prepared. An attorney will usually charge $100 to $150 to prepare a specific Power of Attorney. Consult with your lender and attorney if a Power of Attorney is needed. Remember, not all mortgage companies will allow a closing to take place with a buyer using a Power of Attorney. The attorney you chose to handle your real estate closing should be able to answer your questions about the Power of Attorney process.

Occupancy & Moving

Your Contract of Sale will address the terms negotiated between the purchaser and seller as to when occupancy will be given over to the purchaser. Most contracts state that occupancy will be given to the buyer 24 hours after closing. However, in some instances this is negotiable. Please review the occupancy portion of the contract to determine when you can take possession.

Be aware that some things may come up which would prevent the closing form taking place on the agreed upon date. Attorneys usually order title work as close to the closing as possible so the information will be up to date. Usually there is a built in 5 day extension agreement in the contract. Please check your contract if it appears that the closing will not take place as planned.

It is a good idea to go ahead and contact a moving company if need be to get on their schedule. Ask them about their cancellation and rescheduling policy. At the busy times of the year, some moving companies are booked up weeks in advance.

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A Week Before the Closing

The week before you close on your home is usually a busy week. A few things to remember:

1. Have a Power Of Attorney prepared if needed
2. Confirm your home owner’s insurance policy.
3. Request for the utilities to be changed into your name
4. Prepare to forward your mail
5. Confirm any moving companies
6. Schedule any re-inspections
7. Complete the walk-through
8. Arrange to have the termite bond transferred into your name (if applicable). If there is not a termite bond on the house, you may want to consider quotes from various companies to put your property under bond.
9. Think about adding additional options to your home warranty plan or purchasing a warranty at closing.
10. Ask about a survey for your property
11. Prepare to have the funds needed to close in certified form or wire them to the attorney. We will discuss this with you in more detail.

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Utilities

A few days before closing, the buyers and sellers should call the pertinent utility companies (electricity, gas, water, phone, cable and garbage) to inform them that an ownership change is taking place and that all utilities need to be transferred out of the seller’s name and into the buyer’s name. We can ask the seller for a list of their utility companies.

A seller should request all utilities be taken out of their names the day of closing or 24 hours after closing depending on when the buyer is moving in and occupying the property. (see your contract)

The buyer should request all utilities be transferred into their name when taken out of the seller’s name. Most utility companies will make the switch “transparent” as long as both buyers and sellers give them the same date to make the switch.

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How Comprehensive Is Your Home Warranty?

• Plumbing
• Electrical Systems
• Water Heater
• Furnace
• Heating Ducts
• Water Pump
• Dishwasher
• Stove/Cooktop/Ovens
• Microwave
• Refrigerator
• Washer/Dryer
• Swimming Pool (may be optional)

Reprinted from REALTOR^® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS^®
Copyright 2005. All rights reserved. www.REALTOR.org/realtormag 

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5 Things to Understand About Title Insurance

1. It protects your ownership right to your home both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as mistake in the spelling of a person’s name or an inaccurate description of the property.
    
2. It’s a one-time cost usually based on the price of the property.
    
3. It’s usually paid for by the purchasers, unless the sellers are contributing to the buyers' closing cost. Ask us for more clarification on this topic.
    
4. There are both lender title policies, which protect the lender, and owner title policies, which protect you. The lender will probably require a lender policy.
    
5. Discounts on premiums are sometimes available if the home has been bought within only a few years since not as much work is required to check the title. Ask the title company if this discount is available.

Reprinted from REALTOR^® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS^®
Copyright 2005. All rights reserved. www.REALTOR.org/realtormag 

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Common Closing Costs for Buyers

The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier’s check or wired funds. The title company or other entity conducting the closing will tell you the required amount for:

• Down payment
• Loan origination fees
• Points, or loan discount fees, you pay to receive a lower interest rate
• Appraisal fee
• Credit report
• Private mortgage insurance premium
• Insurance escrow for homeowners insurance, if being paid as part of the mortgage
• Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
• Deed recording fees
• Title insurance policy premiums
• Survey
• Inspection fees—building inspection, termites, etc.
• Notary fees
• Prorations for your share of costs, such as utility bills and property taxes

A Note About Prorations: Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first five days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.

Reprinted from REALTOR^® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS^®
Copyright 2005. All rights reserved. www.REALTOR.org/realtormag 

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The Day of Closing!

Bring your drivers license to the closing.

The attorney and their paralegal prepare a Housing and Urban Development Settlement Statement (HUD) a day or two before closing. This statement is a standard form that has two main columns, one for the purchaser and one for the seller. The HUD should list all of the transactions relating to the closing. For example, if the Pest Control company charged $150 for the termite inspection, you should see an entry for $150 on the HUD in either the buyer or seller column depending on your contract.

The attorney and their paralegal collect information from several parties to put on the HUD. Once they get all of the figures in the right columns, the attorney will give us the exact amount of money needed for closing. Currently, the money you need to close should be wired to the attorney if it is more than $5,000. If the funds needed to close are less than $5,000, you should be able to get a certified check from your bank made payable to the Law Firm. Sometimes, you will not know the exact amount needed to close until right before closing. If you are in a position where you need to secure your funds prior to receiving the exact figures, we can give you an approximation.

The attorney collects the money from the pertinent parties and then disburses checks as needed. For example, if you are paying your home insurance premiums at closing, the attorney will collect that money and then cut and mail a check to the insurance company.

The attorney will address any questions you may have and explain the closing documents to you. We also enjoy going over the HUD with our clients before closing to give them time to think of any questions to ask with the attorney. We have saved our clients money in the past by reviewing their HUD statement with them!

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What to Keep From Your Closing

• The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need this for income tax purposes and when you sell the home.
   
• The Truth in Lending Statement summarizes the terms of your mortgage loan.
   
• The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
   
• The deed transfers ownership of the property to you.
   
• Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
   
• Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
   
• Insurance policies provide a record and proof of your coverage.

Reprinted from REALTOR^® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS^®
Copyright 2005. All rights reserved. www.REALTOR.org/realtormag 

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Referring Your Realtors^®

One of the best things you can do to show your appreciation to any professional is to refer their services. If you are happy with the level of our service and your transaction, we would love for you to pass our names on to your friends and families.

One reason we wanted to utilize this web site is to give our clients a non-intrusive way to refer our services. Please email our web address to anyone you know interested in buying or selling a home. At their leisure, they can browse our site to get a better feel for us and the services we provide.

We hope you have enjoyed working with us. I am sure SkinnyAgent.com has helped you with “The Skinny on Real Estate!”

Sincerely, Chip & Kendra Mosteller - SkinnyAgent.com
Proud members of the Asset Realty, Inc. team

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