Chapter 21: Closing the Real Estate Transaction

Preliminary Requirements for Closing

*   Survey and inspection (encroachments)

*   Title search and report

*   Instruments prepared

*   Deeds

*   Mortgages

*   Notes

Elements of Closing Costs

*   Title assurance charges and legal fees

*   Commissions and escrow fees

*   Property tax prorations

*   Transfer taxes

*   Recording fees

*   Termite and roof inspections

*   Loan related costs

Loan related costs

*   Loan Service Charge

*   Loan Origination Fee

*   Loan Discount Fee

*   Survey

*   Appraisal Fee

*   Prepaid Interest

*   Hazard Insurance

*   Credit Report

Closing Usually Involves:

*   Loan money given

*   Mortgage and note signed

*   Deed signed

*   Remainder of money need by buyer paid

*   IRS reporting requirements (Form 1099)

*   FIRPTA withholding if necessary

*   Role of licensee

RESPA

*   Information booklet

*   Good faith closing cost estimate

*   Uniform Settlement Statement

*   Prohibition against kickbacks

Closing Statement Entries and Proration

*   Agreement

*   $100,000 $100,000

*   Binder

*                                       $10,000                    $10,000

*   Old Mtg Payoff

*   $60,000                                             $60,000

*   New Mortgage

*                                                   $80,000                    $80,000

*   Tax Proration

*   $1,200                                   $1,200

*   Transfer Tax

*   $1,000                      $1,000                      $2,000

*   Subtotals $62,200 $100,000 $101,000 $91,200           $62,000 $90,000

*   Closing $9,800 $9,800

*   $37,800                                             $37,800

*   Total   $100,000     $101,000 $101,000 $99,800 $99,800