Important Stuff to Know

Responsibility of Buyer at Closing

Prior to closing, you will be receiving a disclosure sheet from the bank specifying charges connected with financing. The following is a list, not all of which apply to you. The bank attorney who conducts the closing will compute these and inform you of the grand total which is payable to the bank.

  • Bank attorney fees, which vary from 1/2% to 1% of the selling price.
  • Recording fees for the new deed and mortgage; approximately $50.00.
  • Points (each point is 1% of the mortgage amount). This check should be written separately for income tax records.
  • Appraisal fee: approximately $125-$150 (subject to change).
  • Credit report: approximately $50-$75.
  • Mortgage insurance: varies with amount of the mortgage.
  • Title insurance: varies with amount of the mortgage – approximately $7 per thousand.
  • Survey/Plot plan: approximately $100.
  • Assumption fee: varies from bank to bank.
  • Advance interest: this is the interest portion of the mortgage payment, and is due at closings taking place from the 2nd day of the month through the last day of the month.
  • Real Estate tax adjustments: approximately 3-4 months’ taxes in advance.
  • Municipal Lien Certificate: $15-$25

Bring to the Closing:

  • A certified check or bank check payable to yourself for the purchase price less deposits and the mortgage amount.
  • Your checkbook to pay for any adjustments for fuel or taxes to seller.
  • Your checkbook to pay for Section 1 above.
  • An insurance policy or binder on the property, written for at least the amount of the mortgage and accurately naming the lending institution as first mortgage.

Real Estate Terms

So You Can Look Incredibly Smart & Well Informed When Talking With Anyone!

DEPOSIT: An “earnest money” deposit will be required to show serious intent to purchase a home and will be placed in an escrow account. The deposit will be returned to you if the sale is not finalized through no fault of the buyer. Usually with an offer to purchase a property a deposit of $500.00 is sufficient. At the time you sign the Purchase and Sales Contract, the seller will expect a total of 5-10% of the purchase price to be placed in escrow (or as agreed upon by buyer and seller).

FINANCING CONTINGENCY: This is very important and should be clearly detailed, including the total loan amount, the date a second or third mortgage is due, and the extent of the financing terms. The seller should allow for a reasonable time limit for the buyer to obtain financing before cancellation of the sales contract. Alternative financing clauses are found in many contracts, allowing buyers to obtain financing other than that mentioned in the sales contract, with the stipulation that such financing does not affect the seller’s proceeds.

INSPECTION CONTINGENCY: This contingency requires that a satisfactory home inspection report be obtained for the contract executed. The buyer usually pays for this inspection (which identifies any structural defects in the property), but it’s definitely a worthwhile expense!

PEST INSPECTION: This inspection also is paid for by the buyer. Your contract can require the seller to pay for treatment for any infestation discovered (including repair of damages, if necessary).

PERSONAL PROPERTY: Any items of personal property that are to be conveyed to the buyer such as light fixtures, washers, dryers, refrigerators, should be specified in writing within the contract. This will prevent any misunderstandings regarding ownership of such items.

DEED: A written instrument which, when properly executed and delivered, conveys title.

EASEMENT: Created by grant or agreement for a specific purpose, an easement is the right, privilege or interest which one party has in the land of another. Example: right of way.

LIEN: A form of encumbrance which usually makes property security for the payment of a debt or discharge of an obligation such as taxes, mortgages, deeds of trust, etc.

PERSONAL PROPERTY: Any property that is not real property, ex: money, savings accounts, appliances, boats, cars etc.

CLOSING: The final settlement of a real estate transaction between buyer and seller.

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