Do You Know What Settlement Costs Are, And What Happens At Settlement?
For one thing, settlement means a lot of paper signing. You turn over your keys. (Do not forget the garage keys, and the electric garage door opener, too.)
At the settlement will be an attorney or title company representative, the buyer, the listing and selling brokers and all owners. You should bring all warranties on equipment maintenance or operation.
The attorney will have searched the title, and obtained old and new lender instructions. Any unresolved deficiencies noted in your buyer’s earlier inspection tour (or "walkthrough") will have been resolved.
Your buyer will sign the deed of trust, deed of trust note, and settlement sheets, and will pay the balance of the down payment and all buyer’s closing costs.
You will sign the settlement sheets and the deed, and you’ll pay appropriate closing costs, which commonly total about 10% of the sale price, and may include:
- Settlement fees (preparation of deed, settlement fee, and any release fees)
- Broker’s commission
- Termite inspection
- Loan discount fee (points based on loan amount)
- Mortgage pay-off penalty (see your deed of trust note)
- Interest up to the date trusts are paid off
- Negotiated items of the particular sale
If your taxes and insurance have been escrowed, you’ll receive any money accumulated in the account for bills not yet due. In addition, you will be reimbursed for any money paid in advance and not used, such as insurance. You will receive this refund at or after settlement, depending on the lending company. Taxes and homeowner’s dues or condominium fees will be prorated on a daily basis. You, your buyer and the brokers will all receive copies of the settlement sheets.
Are you thinking about buying a new home, and you don’t know what to expect? Relax. E-mail us or give us a call; we can help you find the best arrangements for your particular situation.
