Chapter 23- Closing The Real Estate Transaction

Question 1

OVERVIEW:

Answer 1

A real estate closing is the culmination of many efforts-finding clients, negotiating offers, solving problems, coordinating inspections, and much more. At the closing, title to the real estate is transferred in exchange for payment of the purchase price.

Question 2

PRE-CLOSING PROCEDURES

Answer 2

Closing involves two major events. First, the promised made in the sale contract are fulfilled; second, the mortgage funds are distributed to the buyer. Before the property changes hands, however, important issue must be resolved.

Question 3

BUYERS ISSUES

Both the buyers and their lenders must be sure that the seller can deliver the title that was promised in the purchase agreement and that the property is now in essentially the same condition it was agreed on the sale.

Answer 3

This involves inspecting:
-the title evidence;
-the seller’s deed;
-any documents demonstrating the removal of undesired lien and encumbrances;
-the survey;
-the results of any required inspections, such as termite or structural inspections, or required repairs; and
-any leases, if tenants reside on the premises.

Question 4

Final Property Inspections

Answer 4

In the real estate contract, the buyer usually reserves the right to make a final inspections(also called a walk-trough) shortly before the closing takes place.

Question 5

EXECUTED CONTRACT-just for my info

Answer 5

1. Send contract to parties of the contract, attorney, lender, brokerage
2. Earnest Money
3. Inspection Scheduled-
4. Attorney communicate.
5. Order appraisal
6. Buyers need to buy home owners insurance
7. Village inspections
8. Final walkthrough
9. Closing

Question 6

CONDUCTING THE CLOSING

Answer 6

-IRS reporting requirements
Licensee’s role at closing
Lender’s interest in closing

Question 7

PRE-CLOSING PROCEDURES

Answer 7

-Buyers issues:
Title inspection
Final property inspection
Survey
-Seller’s issues
Title inspections
-Title procedures

Question 8

RESPA see page 439, what it prohibits?

Answer 8

Section 8 prohibits kickbacks and fee-splitting for referrals of settlement services and unearned fee for services not actually performed

Affiliated business arrangements
Disclosed requirements
-kickback and referrals fees

Question 9

TRI REQUIREMENTS

Answer 9

TILE/RESPA Integrated Disclosure Rule (TRIP)
-LE-Loan Estimate
Delivered 3 business days after application
Discloses all cost

Question 10

HOW THE CLOSING STATEMENT WORKS

Answer 10

1.Calculating buyer cash at closing
2. Calcul

Question 11

PRORATIONS-are necessary to ensure that expenses are divided fairly between the seller and buyer.

Answer 11

TWO WAYS
Statutory/Banker-12 months, 360 days/ 30 days month
Calendar-12 months/365 days