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Title Closing and Escrow

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Chapter 22

In This Chapter

You learn how the process evolves from the buyer’s walk-through to the closing meeting or escrow, prorations, & the settlement statement.

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Buyer’s Walk-Through

This is the final inspection of the property just prior to closing to make certain that the premises have been vacated, no damage has occurred, agreed personal property is left behind, and that no real property has been removed.

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Title Closing This occurs when the buyer pays for the

property and the seller delivers the deed. Settlement meeting – seller meets in person

with the buyer and delivers the deed. Escrow – use of a neutral third party, called

the escrow agent, who acts on behalf of both buyer and seller to carry out instructions of the contract.

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RESPONSIBILITIES AT CLOSING SELLER’S BUYER’S REAL ESTATE AGENT’S ESCROW AGENT’S Reporting Requirements

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Prorations Insurance Loan Interest Property Taxes Rents

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Common Prorations

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Closing Transaction Summary

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HUD Settlement Statement Required of all federally related real estate

lenders Form HUD-1A

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HUD Settlement Statement

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HUD Settlement Statement (continued)

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HUD Settlement Statement (continued)

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Real Estate Settlement Procedures Act To regulate and standardize real estate

settlement practices when “federally related” first mortgage loans are made on residential property

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RESTRICTIONS ON CLOSING PRACTICES prohibits title company kickbacks does not allow referral fees prohibit what titles companies can pay for

outside of their normal business activities

Texas Restrictions on Closing PracticesNote: Title companies can participate in associations of realestate practitioners, attorneys, builders, and developers, and deliver documents or funds to the parties of a closing, so long as they pay the market rate for participating.

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HUD Settlement Statement required of all federally related real estate lenders GFE

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Key Terms Closing meeting Escrow agent Escrow closing Prorating

RESPA Settlement

statement Title closing Walk-through

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