What is important to check in closing documents?
What is important to check in closing documents?
#entrepreneurThis Week - Post No. 4: The Closing Process and Closing Documents.
So as I detailed in the previous post about the closing process, the Teitel company or Teitel agent is chosen by which of the parties to issue Teitel, prepare the necessary transaction documents, sign the parties, concentrate the funds and pay all payments to type the transfer notes (and if there is a mortgage then the Mortgage) and issue the final property insurance policy.
Closing documents - The title company prepares closing documents in accordance with the requirements that appeared in the first part of the commitment to issue insurance (remember the second post… title commitment). The documents will include affidavits of the parties, deeds of transfer of ownership and any other document required in order to meet the requirements of the title and transfer “clean” ownership of the property. In addition, the title company prepares a closing statement - or more commonly - HUD-1.
This document is basically the identity card of the transaction. What does it mean? This report will include the payment of property taxes, brokerage fees, stamp duties and typing fees, and all the debts that must be eliminated will appear. It is important to note that some of the various costs and payment of debts should appear in the seller's column and some in the buyer's column.
It is very important to understand how to read the closing report and pay attention to each and every column to make sure that all the debts that were discovered in the preliminary tests and pledge reports (registered and unregistered) are actually paid out of the closing money and if paid by the seller directly, then make sure it is indicated in the report (POC - paid outside of closing).
It is also important to check the closing costs for stamp duty and typing fees appear in the correct column according to what was agreed between the parties in the sales agreement. The fees taken by the Teitel company are one of the elements that are subject to negotiation and should be bargained for. In many cases where I represent and lend to investors, I manage to significantly reduce the cost that, unlike most closing costs that are fixed or a percentage of the transaction price, the fees are set by the company, which can range from a few hundred dollars to several thousand. It is also possible to demand at the stage of the contract that the seller bear this ownership.
It is important to check how the transaction price is reflected in the report. You may have entered into an investment with an entrepreneur or marketer or seller and agreed on a price of $ 100,000 including everything but in practice, the value of the property in the transaction is only $ 50,000. The difference constitutes entrepreneurship fees, renovations and the like. In principle, the report should state $ 50,000 purchase price and the balance will be specified in part of additional costs. Do not forget that the stamp duty and the property insurance policy premium are a derivative of the price and therefore it is important that the report correctly reflects the correct price.
Since the closure report is a complex document full of details and nuances I always suggest taking someone professional who knows how to read the numbers and make sure that everything is summed up and all the payments do appear properly.
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Keren Ben-Ezra