You can find part one of the series , part two , part three , and last week's edition .
We conclude our series with step five, The Closing.
With the help of your real estate professional, lender and home inspector, you’ve reached the final step in the process of home buying; the closing. This is the time you sign final documentation for financing and deed transfer paperwork required to take ownership of the property. In Georgia, the chosen closing attorney represents the lender in cases where a new loan will be taken out to purchase the property. Of course in cash transactions or cases where a traditional lender is not involved, the closing attorney represents the parties as stated in the terms of the contract for purchase. Even though you might run into situations where the seller will “insist” on choosing the attorney, in Georgia the buyer always has the right to choose the closing attorney that will represent their lender in the transaction. Some lenders may also provide a list of approved attorneys from which the buyer can choose.
One of the documents the attorney will provide is the HUD-1 Settlement Statement. This document is an accurate accounting of the true costs and credits for both parties to the transaction. The HUD-1, as it’s commonly called, is required as part of the Real Estate Settlement and Procedures Act (RESPA). (For a more detailed explanation of all the RESPA requirements, consult your real estate professional or closing attorney of choice.) Some of the charges and credits on the HUD-1 are closing costs, lender fees, title fees, tax pro-rations, interest adjustments, etc. You will typically be provided a review copy of the HUD-1 24 to 48 hours before the scheduled closing date. Any corrections and objections can then be cleared prior to closing. Although, especially with the multitude of foreclosure transactions in today’s market, some sellers and lenders will require the “closing package” including the HUD-1 be submitted as much as a week prior to closing.
One of the most important items listed on the HUD-1 is the amount of funds the buyer will need to provide at closing. This typically consists of the purchase price and remaining closing costs less the adjustments of the loan amount from the lender and any other credits due. It has become a customary practice that the buyer will have their financial institution deposit the funds into the closing attorney’s trust account via electronic wire transfer at least 24 hours prior to closing.
A typical closing takes about an hour to complete. It’s important that you understand the language in the documents that you will sign at closing, but it’s impractical to read every line of each during the actual closing. The closing attorney will explain each document to you and will answer any and all questions you have during the process. Of course, you are entitled to read the documents. If you do wish to read all of the closing documents, I would recommend informing your agent and attorney ahead of the closing and the attorney will accommodate your request by having you arrive a few hours early. Sometimes delays in approval of documents or other factors might delay the closing and funding. I would always suggest that you plan at least a half day in your schedule to close the transaction.
One final item that is often confusing to both parties to the transaction is the need to sometimes reschedule the closing date. The closing date is negotiated as part of the contract terms; while all of the players work to meet that goal, it is sometimes impossible. Some causes of this might be additional time needed to clear a title issue or for a seller to provide a proper deed. Most of our clients close on time; however, anything could happen. Just remember in we told you that buying a home is a process, not an event.
You have now successfully navigated the five most important steps involved in buying a home. The very last part of step five is to say congratulations and hand you the keys to your new home.
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iDeal Real Estate Professionals, LLC is owned and operated by Brandon Bramlett and C. Mark Willix and is affiliated with Maximum One Realty Greater Atlanta. For personalized service, visit us at www.idealrealestateprofessionals.com. You can also email us at email@example.com.