18 Closing

Question 0

The closing process

Answer 0

Parties agree to a neutral 3rd party escrow agent.
Seller provides deed and all docs to show marketable title.
Closing statement prepared showing all debits and credits.
Disbursement of all funds including sellers payment.

Question 1

Closing

Answer 1

The consummation of the real estate transaction where the seller delivers the deed and the buyer accepts it.

Question 2

Location of Closing

Answer 2

Title Insurance company
Attorney’s office
Lending institution
Brokers office

Question 3

Who may attend the closing?

Answer 3

Buyer and Seller
Real Estate Licensees for both parties
Attorneys for both parties
Lending rep
Title insurance rep

Question 4

1099-S IRS Reporting

Answer 4

Form is required to be filed by the escrow agent for all residential transactions. Form contains

1. Sellers social
2. The sales price
3. Any property tax credit to the seller

Question 5

FIRPTA

Answer 5

Requires that a buyer withhold taxes equal to 10% of the sales price when the seller is a foreign national. Foreign investment in real property tax act.

Question 6

RESPA

Answer 6

Ensures that consumers are provided with more helpful information about the cost of mortgage settlement and protected from unnecessarily high settlement charges by certain abusive practices.
Real estate settlement procedures act. 1974

Question 7

Prohibited by RESPA

Answer 7

1. Section 8 - prohibits kickbacks and unearned fees
2. Section 9 - prohibits home sellers from requiring buyers to purchase title insurance from a particular company.
3. Section 10 - prohibits lenders from requiring excessive amounts of upfront fees, taxes and other charges relating to the property.

Question 8

REPSA Lenders

Answer 8

1. Federally insured
2. Savings and Loan
3. FHA
4. VA
5. Loans intended to be sold to Fannie Mae or Freddie Mac secondarily.

Question 9

Lenders must provide:

Answer 9

1. GFE of all settlement costs with 3 days of application.
2. Special info booklet from HUD
3. Uniform settlement statement - HUD1

Question 10

Kickbacks

Answer 10

RESPA prohibits kickbacks and fee splitting for referrals of settlement services and unearned fees for services not actually performed.

Violations are subject to both civil and criminal penalties.

Question 11

Good Faith Estimate

Answer 11

RESPA requires lenders to give loan applicants a GFE of all closing costs within 3 days.
This allows buyers to shop around.
Must indicate you intend to proceed with the loan before you are charged any fee.

Question 12

Controlled Business Arrangements

Answer 12

A package of services offered to a customer by a real estate company.
Title insurance
Mortgage banking
Home inspection
RESPA allows, but must disclose business relationship, and that there are other options available.

Question 13

Affidavit of Title

Answer 13

A legal doc stating certain facts about a property. Generally offered by the seller and is signed and notarized.

1. Marital status
2. Seller is the owner
3. Seller is not in bankruptcy proceedings
4. There are no liens or encumbrances

Question 14

Affidavit of Legal Value

Answer 14

Each deed evidencing a transfer of title and any contact relating to the sale of real property shall have appended at the time of recording this affidavit. Helps departments know what properties have been selling for.

Question 15

Affidavit of Disclosure

Answer 15

Used for properties located in unincorporated parts of the county. A seller of 5 or fewer parcels of land, other than subdivided land, in an unincorporated part of the county, and any subsequent seller, must provide at least 7 days before before transfer of property. Buyer has 5 days to rescind. Includes legal access, emergency services, wells or water, physical access, flood plains, washes, police and fire..etc.