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Preparing to Shop |
Your Real Estate Team |
Making an Offer |
Getting a Mortgage |
Closing the Deal |
After You Buy
Closing the Deal
Final Closing Statement, Closing Day, Move in After a Seller Rent-back, Final Verification of Condition
Final Closing Statement
One of the most important pieces of paper is the final closing statement that you get on the day that your home actually closes.
The final closing statement is like your checkbook, it records all the money related to your home purchase:
- Credits: Any money that you paid in advance (such as your initial deposit and down payment) appears as a credit to your account. You may also receive credits from the seller for such things as corrective work repairs and property taxes. And, of course, your loan is a credit
- Debits: Funds paid out in your behalf are shown as debits. Your debits include modest and not-so-modest expenses, such as what you graciously paid the seller for your dream home, loan fees, homeowners-insurance premiums, and property inspection fees.
Several days before closing, you'll be given an estimated closing statement detailing what your closing costs will be if the home closes as scheduled. Check the estimated closing statement carefully to be absolutely certain that it accurately reflects your credits and debits. Ask questions to clarify any concern you have.
Keep a copy of the final closing statement for your files; you'll want to refer to it when you prepare your income tax return. Some expenses (such as loan origination fees and property tax payments) are tax deductible. Furthermore, the closing statement establishes your initial tax (cost) basis in the property which is an important detail when you're ready to sell your property.
Property transfer day
Put into simple terms, Property Transfer Day is when the buyer pays the purchase price and the seller delivers the deed. Once the title company and lender have given "clearance" to the closing agent, the appropriate documents are processed and the property is officially transferred to the new owner. It is important to keep in mind that the new owner does not take possession of the property until the documentation has been processed, which can take anywhere from one to three days after recording. Once the waiting period is over and the transaction is complete, the new owner can begin moving into their home.
Determining when you actually take possession of your home and move into it depends on the terms of your contract and may be dependant on the state in which you live. In Missouri,
After the sellers vacate and before movers bring your belongings into the house, check your new home for potential damage that may have been caused by the sellers' movers.
Whether you move into your home the day of closing or the following day, you start paying for utilities and homeowners insurance effective the day that it closes. You can work with your Fran Campbell, Inc. agent to coordinate phone installation and resumption of utility services with the proper companies a couple of weeks prior to the scheduled closing.
Move in After a Seller Rent-back
Moving to a new home is an exciting experience. Comprehensive pre-planning, organization and family meetings can help establish each person's responsibilities and will go a long way in maintaining harmony and efficiency.
It's not uncommon for sellers to remain in their house for several weeks after closing while waiting to get into their new home. In this case, you may sign a separate rent-back agreement with the sellers, which becomes part of your purchase contract. The rent-back agreement covers such things as who pays for utilities and maintenance, what happens if there's property damage, how much rent the sellers pay you, and what the penalties are if the sellers don't vacate the property on the date specified in the rent-back.
It's customary for the sellers to pay rent equal to what you're paying for principal and interest on your mortgage, plus property taxes and insurance, so that you don't have out-of-pocket expense on what it costs you to own the house during the term of their rental. The amount equaling Principle, Interest, Taxes, and Insurance (known as PITI) is prorated on a per-day basis from closing until the sellers vacate.
If the home you're buying is vacant, you may be tempted to ask for permission to start fixing the house up before closing. After all, painting or waxing floors, for example, is much easier and faster when the house is empty. Instead, allow some time to do these tasks before moving in and after the closing has taken place.
Final Verification of Condition
Read the "Final Verification of Condition" clause in your purchase contract. If your state's contract doesn't have this type of clause in it, instruct your agent or lawyer to write such a clause into your contract.
Inspect the property a few days (ideally the day) before closing to be sure that the property is in the same general condition that it was in when you signed the contract to buy it.
You'll probably find that everything is fine and any problems may be discussed with your agent and/or attorney. Chances are, you and the seller can work out a mutually satisfactory solution.