Real Estate Law, 8th Ed. by Marianne M. Jennings

1
Real Estate Law, 8th Ed.by Marianne M. Jennings

• Chapter 16
• Closing the Deal

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Requirements for Escrow Instructions

• Name of the agent, third party, or depository
• Names of the buyer (buyers) and seller (sellers)
  and their proper designation (partnership,
  corporation, married couple, single person, and
  so on)
• Legal description of the property to be
  transferred
• (Continued on next slide)

3
Requirements for Escrow Instructions

1. Purchase price of the property
2. Conditions of transfer and payment
3. Allocation of expenses, costs, insurance, taxes,
   assessments, and so on
4. Signatures of the buyer and seller

4
Fees in Escrow

• Escrow fee
• Fees for title search, title abstract, title
  insurance, and attorneys work associated with
  such
• Recording fees for the deed, mortgage, deed of
  trust, and any other documents required
• Mortgage transfer or release fees
• (Continued on next slide)

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Fees in Escrow

1. Loan origination fees
2. Termite inspection report
3. Appraisal or survey fees
4. Credit report fees
5. Loan discount points
6. Other attorneys fees such as for drafting
   documents

6
Requirements for Closing

• Underlying purchase contract
• Deposit of deed with agent
• Valid escrow instructions

7
Closing Costs

• Escrow fee
• Fees for title search, title abstract, title
  insurance, and attorneys work associated with
  such
• Recording fees for the deed, mortgage, deed of
  trust, and any other documents required
• Mortgage transfer or release fees
• (Continued on next slide)

8
Closing Costs

1. Loan origination fees
2. Termite inspection report
3. Appraisal or survey fees
4. Credit report fees
5. Loan discount points
6. Other attorneys fees such as for drafting
   documents

9
Delivery Requirements by Seller for Closing

• Title documents abstract, opinion, and insurance
• Most recent tax bill
• Insurance policies
• Plans and specifications for original
  construction and modifications
• Warranties on any appliances, heating systems,
  and so on
• (Continued on next slide)

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Delivery Requirements by Seller for Closing

1. Uniform Commercial Code (UCC) bulk sale affidavit
   for business transfer (where applicableArticle 6
   on Bulk Sales has been repealed in some states)
2. Soil, termite, and other property condition
   reports, including reports from environmental
   agencies
3. Keys
4. Notes, mortgages, deeds of trust, UCC Article 9
   security agreements and financing statements
5. List of tenants and copies of leases
6. Building code inspection and compliance

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Delivery Requirements for Escrow for Buyer

1. Earnest money check
2. Loan commitment
3. List of defects to be remedied prior to closing
4. Corporate authorization if corporate buyer is
   involved

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Delivery Requirements for Lender for Escrow

1. Mortgage, deed of trust, and promissory note
2. Truth-in-lending statement (see Chapter 15)
3. Real Estate Settlement Procedures Act (RESPA)
   statement (see later for discussion)
4. Required forms if Federal Housing Administration
   (FHA) or Veterans Administration (VA) loan is
   availed
5. Required inspections if FHA or VA loan is involved

13
Requirements for Escrow Instructions

1. Name of the agent, third party, or depository
2. Names of the buyer (buyers) and seller (sellers)
   and their proper designation (partnership,
   corporation, married couple, single person, and
   so on)
3. Legal description of the property to be
   transferred
4. Purchase price of the property
5. Conditions of transfer and payment
6. Allocation of expenses, costs, insurance, taxes,
   assessments, and so on
7. Signatures of the buyer and seller

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Purposes of RESPA

1. To provide more effective advance disclosure to
   home buyers and home sellers of settlement costs.
2. To eliminate kickback or referral fees that tend
   to increase the costs of settlement services.
3. To reduce the amounts buyers are required to pay
   into escrow for taxes and insurance.
4. To reform local record keeping and land title
   information.