CLOSING ON YOUR NEW HOME

The sales contract defines the basic terms and conditions of your agreement to buy a home. It includes the sale price, property description, deposit amounts, mortgage financing and any contingencies that might rescind the contract.

Practices vary from state to state, but counter-offers that are subsequent to the contract's stated sale price are usually appended to the contract.

The sales contract also includes the terms for the loan closing, or settlement. Table 1 is a checklist of some of the major items that should be included in the contract. Table 2 is a checklist of major closing costs.

The Real Estate Settlement Procedures Act (RESPA) governs the loan application and closing process. RESPA ensures that homebuyers receive timely notification of closing and other costs. These disclosures begin when the homebuyer applies for a loan and continue after closing.

Table 1: Major items in sales contract

Sale price
Property address and description
Amount of initial deposit
Terms of mortgage financing
Details for loan closing
Transfer and recording of deed
List of fixtures remaining in home
Repairs required of the seller
Disclosure of easements
Details of sales commission
Details of escrow transaction
Pro rata share of real estate taxes

Table 2: Major closing costs

Amount of first loan payment
Loan underwriting fees
Amounts for insurance premiums
Amount for escrow reserves
Fees for legal services
Fees for escrow services
Fees for title-related services
Fees for recording services

The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should Contact us or Call us at (714) 657-7585 and our representative will help you fulfilling your real estate needs.