Once a buyer and seller have signed the purchase agreement, they are responsible for meeting the conditions of the agreement by the closing deadline. If all goes smoothly, the closing will take place on time.
Closing can take place at the broker's office, the title company, or the lending agency. The procedures usually are not controlled by statute, although certain aspects of the closing may be regulated by laws such as the federal Real Estate Settlement Procedures Act (RESPA). Under the provisions of RESPA, you will receive a copy of your settlement statement detailing your receipts and disbursements involved in the sale.
You are probably wondering what costs you can expect in the sale of your home. In many cases, if an item is not covered in the terms of the contract, the law will prevail. The offer to purchase can spell out responsibility regarding payment of expenses at settlement. Unless the terms of the contract specify otherwise, you are expected to pay the cost of the transfer taxes, the real estate commission, sales tax on the commission, any attorney fees incurred by you, and a prorated share of the real estate taxes, insurance and utility bills up to the day of the settlement. Another cost, which is usually divided equally between the buyer and seller, is title insurance. It is used to furnish evidence of marketable title.
Internal Revenue Service rules require settlement agents to report details of the closing to the IRS using Form 1099-B. Sales or exchanges of residences with four or fewer units must be reported.
Any questions about the settlement statement should be asked of the real estate licensee, the title company representative, or the lending agency representative. Ask these questions BEFORE you sign.
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