Closing On The Sale Of A House: Simple Explainations For The Complex Steps

Getting in a hurry at the closing table has caused me considerable regret more than once when I wanted to sell my house quickly. And the same thing has happened to many other homeowners over the years. Closing a sales transaction on real estate is a complex legal "dance" of sorts, and I don't mean just two people dancing, no, it's not just the buyer and the seller.

There is a whole "chorus line" of people and institutions involved in most real estate transactions. Here are a few of them: home inspectors, bankers, mortgage brokers, termite inspectors, real estate brokers, outstanding lien holders, county taxing authorities, contractors and structural engineers.

There will be deductions from the funds paid at the time of closing to pay the title company and any attorneys hired to oversee the transaction on behalf of the buyer and seller as well. You might say there are a whole lot of people out there on the dance floor at one time!

So, the only way to keep things straight, since this dance involves people paying and getting paid specific amounts of money when selling a house, is to have a form that lists everyone and what they are required to pay and what they are entitled to receive. Congress passed a law in the 1970s requiring a certain form for every transaction, it's called the HUD-1 Statement, and it is still very much in use today, although it was modified in 2010.

In fact, every buyer and seller is supposed to receive a preliminary HUD-1 Statement to review a couple days prior to the closing date. This is where many people have come to regret their haste (and I have been one of those people) if no preliminary HUD-1 form was prepared or reviewed. I have learned the hard way to take a careful, thorough look at the HUD-1 form every time, especially when I sell my house quickly.

I simply will not sign sales documents until the HUD-1 form is correct. The form contains specific dollar amounts that change on a daily basis, such as mortgage payoff amounts and outstanding property tax balances. So, everything has to be reviewed again at the closing table, and that is not the time to be looking over the form for the first time.

Frankly, it can be overwhelming. I strongly suggest that you have your real estate broker, your attorney or your title company representative walk you through the HUD-1 well ahead of the date and time of closing, that way you will completely understand it and there will be no surprises. You will have learned all the right steps before showing up for the big dance!

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