Wire fraud, email hacking and phishing attacks are on the rise! ONLY accept wiring instructions sent to you via our CertifID secure platform. NEVER respond to any emails that claim to contain revised wire transfer instructions, even if they appear to be sent by our company. Our instructions will NEVER change. Outgoing wires are also verified through CertifID.
Down and Dirty 30 – Fee Disclosures
ONE OF A SERIES OF 30 MINUTE TOPICS THAT GET RIGHT TO THE POINT
SUMMARY | It’s oftentimes the most important question in the closing… how much?!? This discussion will highlight what, how and when the buyer, seller and brokers will learn about their fees. We will illustrate Net to Seller, Closing Disclosures vs Settlement Statements, and Instructions to Closing Attorney and how to navigate this process and ensure the numbers are right.
NET TO SELLER | A very simple calculation but oftentimes delayed by getting actual invoices. First, lets look at the contract:
Formula: Purchase Price – Loan Payoffs – Unpaid Taxes – Commissions – HOA Charges – Title Issues – Other Charges + Credits & Reimbursements
Timing: Buyers need to budget and prepare for Closing, wanting information ASAP to allow for requesting the wire and even liquidating assets.
Closing Disclosure is issued three (3) times!
Day 1 (Beginning of Contract)
What’s right? Lender Charges.
3 Days Prior (Week of Closing)
What’s right? Lender and Attorney Charges
What’s right? Everything!
The CD is an elaborate dance between the Closing Attorney and Lender!
The two parties work to “balance” the week of closing, ironing out details regarding insurance, taxes, escrows and more. If any information is missing (i.e. insurance, HOA) or one of the parties is not responding (LENDERS!), the final CD will be delayed to the Buyer.
Final Settlement Statement is typically sent the day before closing or sooner, once the Lender has approved the final numbers.
Suggestions Going Forward:
Review the initial disclosures and try to fill in the blanks and get better estimates.
HOA – add in the HOA charges that were disclosed;
Insurance – is it accurate, too high/low?
EM Deposit – is it listed?
Is the Loan amount correct?
As Closing approaches use the 3 Days Prior CD and advise your client to send a wire based on those numbers. BUT – estimate high and send additional funds!
Bring a check to closing – this can be used to fund up to $5000 in additional money owed at closing that the wire doesn’t cover.