Phoenix Urban Living News. Real Estate In Phoenix Arizona

The Real Estate Settlement Statement

You’re about to cross the finish line in your home selling process. There are a few more steps that you need to complete before you hand over the keys to the home. During the home closing, the primary document you and your buyer will probably be dealing with is the settlement statement (also known as the closing statement). This can be a document that lists the fees and charges that you, because the seller, and the buyer are required to pay in the housing transaction.

The settlement statement is prepared either by the buyer’s lender or even the escrow agent. Regardless of who prepares the statement, see your face is required to follow pertinent federal guidelines. The Real-estate Settlement Procedures Act of 1974, the governing law for closing processing in housing transactions.

It is important that you pay close attention to the settlement statement because for sale by owner seller as it will list out the costs that you and the buyer are responsible. Most likely, you and the buyer previously negotiated which of you will likely be paying which closing costs. You must review the settlement statement to ensure these costs are actually assigned to the correct party.

Usually, the settlement statement is separated into two pages. The first page summarizes payments to be made in the housing transaction. Included will be the sales price of the property, settlement charges the borrower must pay, tax adjustments, settlement charges the seller (you) must pay, first mortgage payoff amount, and total sum of cash the borrower (the customer) must pay to the seller.

The 2nd page of the settlement statement lists the settlement charges that you and the buyer are required to pay. This page is when your previous closing cost negotiations will be. Your sales contract must also list these charges and to whom the charges were assigned. There would have been a group of charges that are related to processing the mortgage, whether it’s a new mortgage or perhaps an assumed one. Typical fees will be the loan origination fee, appraisal fee, lender’s inspection fee, assumption fee, and underwriting fees.

The mortgage company often requires some interest and insurance costs to be paid beforehand. Usually paid by the buyer, these fees are also listed on the second page with the settlement statement. Other mortgage related costs include reserves which can be deposited to set up an escrow account. These charges are assigned to the buyer.

Another band of fees included in the settlement statement are matched to guaranteeing the legitimacy of the title: title search, title insurance, document preparation, notary fees, and attorney fees. Refer for the sales contract for the agreements made related to these fees.

Government fees include recording fees, tax and stamps and are usually negotiated in the sales contract.

The ultimate group of charges is miscellaneous charges that have been not included in previous sections of the settlement statement. For instance, a pest inspection requested by the buyer is a miscellaneous charge.

The settlement charges are totaled and entered around the first page within the summary information on the first page of the settlement statement.