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Mandb

This chapter discusses the closing process for real estate transactions. It describes the key steps, including the buyer's final walk-through inspection of the property before closing. At the closing or settlement meeting, the buyer pays for the property and the seller transfers the deed of ownership. An escrow agent may also facilitate the closing by acting on behalf of both parties. Responsibilities of the buyer, seller, real estate agents and escrow agent are outlined. The chapter explains how costs such as property taxes and insurance are prorated between the buyer and seller. Requirements for the HUD settlement statement form, which details all closing costs and payments, are covered.

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Nanz11 Serrano
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18 views2 pages

Mandb

This chapter discusses the closing process for real estate transactions. It describes the key steps, including the buyer's final walk-through inspection of the property before closing. At the closing or settlement meeting, the buyer pays for the property and the seller transfers the deed of ownership. An escrow agent may also facilitate the closing by acting on behalf of both parties. Responsibilities of the buyer, seller, real estate agents and escrow agent are outlined. The chapter explains how costs such as property taxes and insurance are prorated between the buyer and seller. Requirements for the HUD settlement statement form, which details all closing costs and payments, are covered.

Uploaded by

Nanz11 Serrano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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2.

Chapter 15 Title Closing and Escrow


3. In This Chapter You learn how the process evolves from the buyer’s walk-through to the
closing meeting or escrow.
4. Buyer’s Walk-Through This is the final inspection of the property just prior to closing to make
certain that the premises have been vacated, no damage has occurred, agreed personal
property is left behind, and that no real property has been removed.
5. Title Closing • This occurs when the buyer pays for the property and the seller delivers the
deed. • Settlement meeting – seller meets in person with the buyer and delivers the deed. •
Escrow – use of a neutral third party, called the escrow agent, who acts on behalf of both
buyer and seller to carry out instructions of the contract.
6. RESPONSIBILITIES AT CLOSING • SELLER’S • BUYER’S • REAL ESTATE AGENT’S •
ESCROW AGENT’S • Reporting Requirements
7. Prorations • Insurance • Loan Interest • Property Taxes • Rents
8. Common Prorations
9. Closing Transaction Summary
10. HUD Settlement Statement • Required of all federally related real estate lenders • Form
HUD-1A
11. HUD Settlement Statement
12. HUD Settlement Statement (continued)
13. HUD Settlement Statement (continued)
14. RESTRICTIONS ON CLOSING PRACTICES • prohibits title company kickbacks • does not
allow referral fees • prohibit what titles companies can pay for outside of their normal business
activities Note: Title companies can participate in associations of real estate practitioners,
attorneys, builders, and developers, and deliver documents or funds to the parties of a
closing, so long as they pay the market rate for participating.
15. Key Terms • Closing meeting • Escrow agent • Escrow closing • Prorating • RESPA •
Settlement statement • Title closing • Walk-through

1. TITLE CLOSING (CHAPTER 16)


2. Title Closing • The final step in the process of transferring title from grantor to grantee • Title
closing is referred to as the following: Closing date, Closing, Settlement, Escrow • Buyer’s
responsibilities before closing • Obtaining financing • Examining the title evidence • Having the
property surveyed • Obtaining property insurance • Having the property inspected • Seller’s
responsibilities before closing • Prepare the deed • Remove encumbrances • Cooperate with
inspectors
3. Buyer’s Walk-Through • This is the final inspection of the property just prior to closing to
make certain that the premises have been vacated, no damage has occurred, agreed
personal property is left behind, and that no real property has been removed
4. HUD Settlement Statement • What is the HUD-1? • Purpose • Prorating • Credits • RESPA
requirements
5. Common Prorations
6. Good Faith Estimate of Closing Costs
7. Closing Costs • Costs generally paid by the buyer at the closing • Loan origination fee • Loan
discount points • Appraisal fee • Credit report fee • Lender’s inspection fee • Mortgage
insurance premium • Attorney fees • Hazard insurance premium • Recording fees for the
mortgage • Costs generally paid by the seller at the closing • Real estate brokerage
commission • Attorney fees • Documentary stamp taxes, where required • Recording fees for
the satisfaction of the seller’s mortgage
8. HUD Settlement Statement Example • Settlement statement shown in text for the
transaction between Williams and Howell. • The transaction amount is $189,000. • The seller
has an outstanding loan for $113,245 that must be repaid. • The buyer is borrowing $150,000
from his lender. • Both buyer and seller must pay certain closing costs. • After consideration of
these costs and the prorated taxes, the buyer must bring $37,243.28 to the closing and the
seller will leave the closing with $58,548.96.
9. Figure 7.1
10. Figure 7.1 (continued)

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