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UNDERSTANDING YOUR CLOSING DOCUMENTS

Buying or Selling a Naples Home Involves Closing Documents:  Don't Sign If You Don't Understand!   It is Important That You Understand What You Are Signing Before You Sign.

What you can expect:  During a Naples real estate closing, both the Naples Home Buyer and the seller are required to sign many important documents. The following is a list and brief explanation of most of these documents.

HUD-1 Settlement Statement:  A standard form used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate.  It is filled out by the settlement agent and It contains real estate and loan costs as well as tax prorations, home owners' dues and insurances.  The buyer’s agent should review the statement and ensure that it is correct.    Signed by the buyer and seller

The Deed:  Transfers title of the property from the seller to the buyers.  Signed by the seller

 Note: An agreement between the buyer and lender stating the borrowing terms.  Signed by the buyer

Mortgage:  Evidences the existence of the loan and the lein placed on the property which secures the loan and gives the lender the right to foreclose on the property if borrower fails to make payments. Signed by the buyer

 Regulation Z - Truth in Lending Statement:  This document discloses the amount financed, interest rate, the annual interest rate and the total cost of the loan over its life. also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling.         Signed by the buyer

Payment Letter:  This shows the monthly payment.   Signed by the buyer

Title Insurance:  Is meant to protect an owner's or a lender's financial interest in real property against loss due to title defects, liens or other matters. Signed by the buyer

Lender's Title Insurance Notice:  This lets the buyer know that the lender's title insurance protects only the lender. Signed by the buyer

Anti-coercion Form:  This requires buyers to stare that they have not been pressuredto buy hazard insurance from a particular company.  Signed by the buyer

Proration Agreements:  This states that the buyer and seller will proratethe taxes and homeowners'  dues if there is a change in these amounts.  Signed by the buyer and seller

Ellen Mann is an he Accredited Buyer’s Representative (ABR®) which is a designation awarded by the 
Real Estate Buyer’s Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR)

Closing Costs: 
Closing costs are simply the fees associated with 1) purchasing a home, 2) borrowing money, and 3) preparing paperwork to finalize the sale. Your total closing costs will vary depending on where your new home is located, what type of property you are buying, the price of your home and the complexity of the transaction. 
It is extremely important that you work closely with your buyer’s representative in the early stages of your home search to estimate what these costs could be, since closing costs can easily represent thousands of dollars.

The main categories are: 
Discount points to buy down the mortgage:

If you want to reduce the ongoing cost of your mortgage over the life of the loan, you’ll want to consider this optional fee. Amounts can vary significantly, from 0.5 to 3 points on the total mortgage amount. This is a one-time charge that is fully deductible as mortgage interest.

Costs for originating the mortgage: 
This generally includes a variety of fees such as the loan origination fee, the appraisal fee and the cost of credit reports. Other related closing fees may include hazard and mortgage insurance, and interest accrued on the mortgage between closing date and the end of the month.

Taxes and other local fees: 
Charges will vary according to local government requirements. Some may demand that property taxes be pro-rated according to when you officially own your home. You may also be required to pay personal property taxes, homeowner’s association dues, and other assessments that are specific to the area that you are moving into.

Documentation costs: 
You will have to pay for any research involving public records and title history for your new property. This insures that the title is unencumbered by other ownership claims or liens and can be delivered to you at closing. Other costs include recording and transfer fees, which cover legally recording the deed to your name.

Face‐to -face closings are common in most states, although a few states do not require them. 
Your ABR® (Ellen) can provide details for your situation. The participants usually include:  the buyer. The seller,The real estate agents representing the buyer(s) and seller(s), Attorneys for the buyer(s) and seller(s),
The closing agent, the title insurance representative, and the escrow agent. 
Often one person
fulfills all three roles, coordinating and recording the exchange of the documents and 
money, disbursing funds, and handling various closing details.

WHERE IS CLOSING HELD? 

Closings are usually held at a title company’s office. Their job is to confirm the current legal owner of the 
property, reveal any mortgages, liens, judgments or unpaid taxes on the property, and identify any 
restrictions that may affect the sale of the property. Any problems need to be corrected before a buyer 
can receive “good title.” 

WHAT DO I NEED TO BRING? 

Your ABR (Ellen) can advise you on what you’ll need to bring to closing, but typically buyers must provide: 
Payment of closing costs, Proof of insurance, Approval of inspections of the property,  (Ellen will advise you on what to bring to the closing.)

WHAT HAPPENS AT CLOSING? 

You’ll sign many documents. Rely on your buyer’s rep and your attorney to review these documents and 
answer any questions you may have. Frequently ‐used documents include: 


     Closing statement (HUD 1) – details all funds changing hands between the buyer and seller

     Truth in Lending statement –a final summary of the terms of your loan

     Mortgage note –a legal obligation to repay the lender according to stated terms

     Deed of trust – The legal transfer of ownership; gives the lender a claim against your home 
                                 if you fail to meet the terms of the mortgage note

     Affidavits –any binding statements by the buyer or seller

     Riders –any contract amendments that impact your rights

     Any additional documents required in your state. 

 Once all documents are signed and all monies have been paid, possession is transferred and you receive the keys to your new home. 
Be sure to keep your closing documents in a safe place for future 
reference. Some of the expenses 
associated with your home purchase are tax deductible.

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Ellen Mann    
(239 )434-9021     (239) 571-4416       
 www.RealEstateMann.com

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Buying a New Home in NaplesThis is the time when you really need an agent to represent you and your interests.The professional sales people at the development are employees of the developer and it is their job to represent the developer and protect his interests.  
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