The Schuman Team knows firsthand how stressful settlement can be for both buyers and sellers. So, we have put together a few tips to help prepare you for a smooth sailing, stress-free settlement.
1. ID: Bring your driver’s license. The first thing the settlement attorney is going to ask for is a copy of your driver’s license. Passports will work fine. Technically, the settlement agent will accept any government issued photo identification that is NOT EXPIRED. This is an easy one to check off your list!
2. Wires/Checks: Buyers should rely on the estimate of the total funds needed to close provided by their lender and not wait for an exact figure from the title company; estimates are good and it lowers your stress by wiring in that amount in plenty of time prior to closing.
Wires are much more the “today” way to send funds. Sending a wire early is always a wise suggestion.
Title companies typically don’t mind personal checks for amounts under $1000.00 but most buyers in the Washington Metropolitan area are going to owe a lot more than that at settlement. Check with your title company to find out what their rules are for checks. Title companies vary widely on what they allow. Your personal checkbook check does not work and can hold up your transaction.
In some cases sellers are bringing money to the table because they are “upside-down” on their mortgage. Definitely bring a certified check or wire funds a few business days ahead! If you have brought too much the title company will issue you a check for the overage at settlement.
3. HUD-1: I like to review the HUD-1, also called settlement sheet, with my clients before settlement to make sure they understand each line item/adjustment. Think of the HUD-1 this way ~ it’s the receipt you get from settlement, proof that you bought or sold a property. It is actually considered a substitute 1099 for sellers.
It is a tricky form to understand but that is what the title company is for. In settlement they will detail each line and each adjustment. Please note that the HUD-1 will be modified all the way up to closing and it’s not uncommon for changes to be made at the table for the last minute invoices that roll in such as termite report, repair bills etc. Understanding that this is a work in progress is a good idea and will relieve undue stress.
4. Readers: Do you read every word of every document? You know who you are. There is nothing wrong with being thorough BUT please prepare your real estate agent and the title company. For sellers, your agent can ask for documents early so you can review in advance. For buyers, depending on how early the lender can get your package to the title company, perhaps you should make arrangements to go in early.
Please know 99% of the package is boilerplate and you won’t be able to make changes no matter how unfriendly the language reads. You need to focus on the few key documents – HUD-1, Deed of Trust, etc. Keep in mind many of the documents will be documents you have already seen and signed previously with the lender. Some documents are redundant in the closing package but each lender has their way of doing things. Closing should be quick, approximately 1 hour.
We hope these tips are helpful and that you have a very pleasant settlement. If you need a settlement attorney, definitely call Joy Siegel, Principal at Settlement Pros in Bethesda MD at 301-907-8100. She has a terrific team that gets the job done well and on time. As always, The Schuman Team is here for you as a resource. We are gearing up for the Fall 2012 market and excited to work with new buyers and sellers! Contact Betsy at 301-996-8700 to schedule a private consultation.