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What’s on a Real Estate Closing Statement?

March 23, 2022/in Real Estate, Resources

Home sales in 2021 increased by 8.5 percent from 2020.

Each time someone buys a home, they work through many steps before closing on it. A few days before closing on a house purchase, the buyer and seller receive a real estate closing statement.

What is this statement, and what information can you find on it?

Here is a guide to help you know what a real estate closing statement is, how to read it, and the information you’ll find on it.

A Real Estate Closing Statement Is A Summary

The best way to explain a real estate closing statement is to know that it summarizes the financial details of a real estate deal.

In some cases, the firm handling the closing creates one statement that includes the information for the buyer and seller.

In other cases, they create two statements: one for the buyer’s information and the other for the seller’s information.

The closing statement summarizes all the money coming and going for the buyer and seller, and each party can read through it to see the transaction details.

The bottom of the statement shows the final amounts for the buyer and seller. It shows how much money the seller receives at closing and the amount of money the buyer must bring to the closing.

The Information Found On A Closing Statement

A closing statement crams a lot of information into one document, but here are some of the main things you’ll find on it:

The Costs For The Buyer

When reading the buyer’s statement or section, you’ll see information relating to the costs the buyer must pay for the home purchase. Of course, the main cost is the agreed-upon selling price.

Additionally, the buyer has other costs, too. For example, the buyer must pay the closing costs the lender charges. You might see multiple lines for these charges.

The buyer also pays for inspections and the appraisal, and the real estate closing statement lists each one individually. The buyer generally pays for title insurance and title services, too.

The buyer might also have to invest some money into their escrow account when closing, and this amount also appears as a debit on this statement.

The person preparing this document includes every expense the seller pays for in the deal, and they typically list these as debits.

The Credits For The Buyer

In addition to listing all the buyer’s costs for the house, the statement also lists any credits the buyer might receive. Credits reduce the cost of the home purchase, and you’ll find several of these on this statement.

For example, the buyer should receive a credit for prorated property taxes. Property taxes accrue for the year before, and the seller should reimburse the buyer for the time they lived in the home until the closing date.

The earnest money and down payment the buyer offered also appear as credits on the statement, as they reduce the amount the buyer must pay at closing.

The Costs For The Seller

Next, you’ll see a section for the seller’s costs. The seller won’t have as many costs as the buyer, but they’ll still have some expenses associated with the sale.

First, the seller must pay the balance they owe on their mortgage if they have one. This amount reduces the profit they receive from the sale.

The seller also pays the real estate commission, reducing the amount the seller receives at this appointment.

In some cases, sellers pay for some of the closing costs, inspections, and other expenses. The seller also pays the prorated property taxes, and you’ll see all these amounts on the seller’s expense column.

The Credits For The Seller

The seller also receives credits, beginning with the home’s sales price. The sale’s price might be one of the few credits you see on the statement, but there might be others in some situations.

The Bottom Line For Both Parties

At the bottom of the statement, you’ll see the bottom line for both parties.

When it comes to the buyer, they’ll add up all the costs the buyer must pay. Next, they’ll subtract all the credits. The amount they calculate after doing this reflects the amount of money the buyer must bring to closing.

The buyer may need a cashier’s check for the amount, or they might accept other forms of payment.

The bottom line for the seller shows how much the check will be for when they attend the closing appointment. They calculate this by adding up the credits the seller receives and subtracting the seller’s costs.

Therefore, the real estate closing statement shows the buyer how much to bring, and it shows the seller how much they’ll receive.

The Importance Of Reading It Before Attending The Appointment

Whether you’re buying a house or selling one, hiring a real estate attorney is an essential step you shouldn’t forego. Your attorney handles the closing work for you and ensures its accuracy.

You should receive a copy of the closing statement a few days before the scheduled appointment. When you get it, you should read it through line by line.

All the documents you sign at the closing come from the information on this one document. So if you find errors, you shouldn’t close on the deal until they fix them.

If you find mistakes, fixing them before closing is much simpler than fixing them afterward.

For example, suppose the statement doesn’t include the earnest money you paid when you wrote the offer. If this happens, you’ll pay more for the house than you should, as your earnest money reduces the amount you need.

Use A Real Estate Lawyer For Assistance

Learning about a real estate closing statement can help you prepare for buying or selling a home. Then, when you hire a real estate lawyer for help, you’ll have the legal protection and assistance you need for the sale.

If you need a real estate lawyer in Greenville, SC, contact us at De Bruin Law Firm. We can help you with any type of real estate sale!

What New Real Estate Agents Should Know about the Closing Process

November 30, 2017/in Real Estate

New Agents and the Closing Process

The closing is the final step in a real estate transaction. During the closing, the sellers transfer ownership of the property to the buyers. The sellers will receive any proceeds they have earned from the sale of their house, and the buyers will be able to move into the house after the closing. The real estate agent also receives a check for commission earned from the sale. Finding the right home for buyers usually takes several months; thus, the closing is an exciting time for buyers and their agents.

A real estate agent’s role is central to the success of a real estate transaction, and this role is no less important during the closing itself. A real estate agent should make sure that all of the right documents are included in the closing package that the buyers will sign. Although a closing attorney will review the documents for legal accuracy, the real estate agent must make sure that the terms of the sale are correct and that documents involving the property are accurate.

For example, if there are any title issues, such as defects, with the property, the real estate agent may assist in resolving these matters. The real estate agent will also notify the parties of the closing date and location and will assist with coordinating the buyer’s final walkthrough of the home.

New Rules For Agents and Lenders

Toward the end of 2015, new rules were established that impact the closing process. All real estate agents should be aware of these procedures to ensure that the closing process goes smoothly and that all applicable laws and regulations are followed. If errors occur during a closing, it may cause delays in the transfer of ownership of the property, which will likely make clients very unhappy.

Lenders, instead of the settlement agents, must now prepare and deliver the closing disclosure form. This form is five pages long and contains details about the mortgage loan, such as its terms, the projected monthly payments, and closing costs. The lender must deliver this document to the buyer at least three business days before the closing occurs. The real estate agent must ensure that the closing agent has all of the information necessary to complete the closing disclosure form. In addition, the real estate agent will need to provide his or her broker’s state license number and the individual real estate license number for the closing disclosure form.

If any changes to the closing disclosure form cause the annual percentage rate to become inaccurate, the buyer changes loan products, or a prepayment penalty is added, a three-day waiting period may be triggered. Further, if any changes impact the value of the property, additional disclosures and review periods may be required.

After the closing

On some occasions, issues arise after the closing that the real estate agent will need to address for the clients. For example, if the buyers received a home warranty with their new home, they may need help filing a claim. The buyers may also have questions about the repairs that were to be done to the home prior to moving in. If the buyers are not satisfied with the status of any repairs, the agent may need to assist with resolving this conflict.

Let the De Bruin Law Firm Handle Your Closing

At the De Bruin Law Firm, our real estate attorneys are experienced in transactions of all types. We work closely with real estate agents to ensure clients are comfortable during the closing process. To speak with our attorneys about scheduling a closing, call (864) 982-5930 or visit debruinlawfirm.com.

How Real Estate Agents and Closing Attorneys Can Help Clients Prepare For Closing

November 25, 2017/in Real Estate

What Good Agents Often Do

A good real estate agent makes a tremendous difference in the sale or purchase of a property. For first-time home buyers, an experienced real estate agent is key to alleviating many of the concerns and answering the numerous questions they will have throughout the transaction. As the transaction comes to a close, the real estate agent should take several steps to ensure the closing is completed as smoothly as possible.

First Time Home Buyers

Many clients are nervous about the sale or purchase of a home, especially if it is their first time doing so. Real estate agents should remember that, in addition to working hard to land a good deal for their clients, they should also focus on being approachable. Clients should feel as though they can call or email their real estate agent with their questions or concerns, no matter how small they may seem. A real estate agent who is friendly and patient will no doubt have clients return for future purchases or sales.

However, at the De Bruin Law Firm, our Real Estate Closing Attorney’s try to fill that role as soon as the contract and title request is submitted to us. We believe we can help facilitate a great closing experience that ensures the agents clients are satisfied and the process is enjoyable.

Helping Your Clients Prepare

Real estate agents help their clients prepare for the closing by ensuring all documents are in order and that the clients fully understand the terms of the sale. Document errors are a common reason for a delay in closing. Clients will be very frustrated if they take time off of work to come to a closing to sell or buy a piece of property, only to find out that a simple error in a document will delay the entire process.

As each offer and counteroffer are made and received on the property, the real estate agent should go through the terms and conditions presented and answer any questions the clients may have. The real estate agent will also discuss potential closing dates with the clients to settle on a date that works for all of the parties. In addition, the real estate agent will coordinate a final walk through of the property before the closing. The agent will again address any concerns that the clients have prior to finalizing the deal.

The real estate agent will also request final closing figures from the closing attorney so that the clients understand how much the transaction will cost them. The real estate agent should also go over all of these numbers in detail to ensure that they match the negotiated terms. The Closing Attorneys at the De Bruin Law Firm will also assist the agents client in understanding the closing numbers.

How Attorneys and Agents Can Help Each Other

Real estate agents should also tell their clients about the different types of documents they will need to sign at the closing. The more clients know about the closing, the more comfortable they will feel during the process. Most clients do not like surprises during these transactions! Real estate agents should explain the closing disclosure, which should arrive at least three business days before the closing. They should also explain the details of the promissory note, the deed, the escrow statement, and the deed of trust. Clients will be much happier when they know about the documents placed in front of them than if they are presented with a stack of documents they have never heard of.

Clients should also understand that they cannot bring a personal check to the closing. Real estate agents should make sure that clients know a cashier’s check or certified check is required at the closing unless the amount owed is over $5,000.00. In those circumstances the De Bruin Law Firm requires funds to be wired no later than 24 hours from the date of closing. Money issues will certainly bring a closing to a standstill.

Contact our offices to schedule a closing today

At the De Bruin Law Firm, our closing attorneys carefully review closing packages to avoid issues during the closing. Real estate agents appreciate our efforts to keep their clients happy. Call 864-770-8880 or visit debruinlawfirm.com to schedule your closing.