Real Estate Action Center

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).

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; 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. By formal legislations, in most areas, 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, attorney fees, owner and lender title insurance, recording fees, 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 trust 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 a Real Estate Action Center Higher Standards Sales Representative to determine your exact charges.

Signing the Dotted Line

With the seller, the attorney explains the settlement sheets and gets the home seller's signature on them and the deed. The seller then pays appropriate closing costs. If the seller's taxes or insurance have been paid in advance, the seller will receive any money accumulated in the account for bills not yet due. The seller will receive these refunds at or after closing, depending on the area. Taxes and homeowner's dues or condominium fees will be prorated on a daily basis. Seller, buyer and brokers are supplied a copy of closing statements for their records.

The house keys are passed. You are now the proud owner! Congratulations!!