1. © 2012 Cengage Learning

2. Title Closing and Escrow Chapter 15

3. © 2012 Cengage Learning In This Chapter You learn how the process evolves from the buyer’s walk-through to the closing meeting or escrow.

4. © 2012 Cengage Learning 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.

5. © 2012 Cengage Learning 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.

6. © 2012 Cengage Learning RESPONSIBILITIES AT CLOSING SELLER’S BUYER’S REAL ESTATE AGENT’S ESCROW AGENT’S Reporting Requirements

7. © 2012 Cengage Learning Prorations Insurance Loan Interest Property Taxes Rents

8. © 2012 Cengage Learning Common Prorations

9. © 2012 Cengage Learning Closing Transaction Summary

10. © 2012 Cengage Learning HUD Settlement Statement Required of all federally related real estate lenders Form HUD-1A

11. © 2012 Cengage Learning HUD Settlement Statement

12. © 2012 Cengage Learning HUD Settlement Statement (continued)

13. © 2012 Cengage Learning HUD Settlement Statement (continued)

14. © 2012 Cengage Learning 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 Note: Title companies can participate in associations of real estate 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.

15. © 2012 Cengage Learning Key Terms Closing meeting Escrow agent Escrow closing Prorating RESPA Settlement statement Title closing Walk-through