RE07R19: Closing and Settlement

Approved Oct. 2, 2019

Role of the Closing/Settlement in the Real Estate Cycle:

Listing, Showing, Offer and Acceptance, Purchase & Sale Agreement, Home Inspection, Financing & Appraisal, Title Search, Closing/Settlement

II.         RESPA -Real Estate Settlement Procedures Act

             A.  History

             B.  TIL

             C.  TRID

                   a. Closing estimate

                   b. Closing disclosure

III.       Steps to Prepare Your Clients for TRID

             A.  CFPD Consumer Financial Protection Bureau

IV.       Sellers Closing Cost and Responsibilities

             A.  Deed

                   a. Quitclaim deed

                   b. Warranty deed

             B.  Land Court Title/Registered

             C.  Real Estate Commission

             D.  Municipal Lien Certificate (MLC)

                   a. Prorations of Water, Sewer & Taxes, fuel etc. (math examples)

             E.  Recording Fees

                   a. Discharge of Mortgage

                  b. M.L.C.

            F.   Sellers Attorney Fees

            G.  Mortgage Payoff

                  a. Wiring or Overnight Payoff Check

            H.  Urea Formaldehyde Foam Insulation Certificate (UFFI) Certificate / Lender Requirements

            I.    Smoke Detector/Carbon Monoxide Certificate

            J.    Excise Tax Stamps

            K.  Title V (if applicable)

            L.   Lead Paint Forms

            M.  Certificate of Occupancy

                   a. Order of Conditions / Board of Health

            N.  Condo

                   a. Condo Documents / Master Deed, By-Laws, Rules and Regulations, Master Insurance,

                       Minutes of last meetings, Budget

                   b. 6D Certificate

                   c. Condo Reserve Fund

                   d. Title V (shared system)

V.        Buyers Closing Costs and Responsibilities:

            A.  Real Estate Commission*

            B.  Home Inspection costs

                   a. Lead Paint

                   b. Radon

                   c. Pest

           C.   Bank Application Fee

           D.   Appraisal Fee

           E.   Plot Plan

           F.    Financing Points

           G.   Fuel Adjustment

           H.   Buyers Attorney Fees

           I.     Insurance & Tax

                  a. Flood Insurance *

                  b. Private Mortgage Insurance (PMI)

                  c. Home Owners Insurance (HO6 Insurance in a condo)

                  d. Title Insurance (lenders and owners)

                  e. Tax Escrow

           J.    Bank Attorney Fees (Title Search)

           K.    UFFI Certificate / Lender Requirements

           L.    Recording Fee

                  a. Mortgage Deed

                  b. Mortgage Note

           M.   Condo

                  a.   Advance Condo Fee

                  b.  Condo Reserve Fund (transfer or assign)

                  c.  Master Insurance Policy

                  d.  By-Laws & Rules and Regulations

VI.      Documents at Closing:

          A.    Deed

          B.    Mortgage

          C.    Mortgage Note

          D.    Mortgage Discharge

          E.    Municipal Lien Certificate

          F.     Attorney Certification of Title

          G.    Closing Disclosure

          H.    UFFI Statement, Flood Certification

           I.     Plot Plan

          J.     Insurance Policy / Binder

          K.     Lead Paint Certification

          L.     Smoke Detector / Carbon Monoxide Certificate

                  a. Certificate of Compliance

          M.      Loan disclosure/Closing disclosure

          N.      Affidavit or Amendatory of Purchase & Vendor

          O.     W-9's

          P.     Application Form

          Q.    Commitment Letter

          R.    Title Insurance

                  a. For Probate Properties and Death Certificate or Power of Attorney and Power to Sell IRS,

                  b. Estate Liens (consult attorney)

                  c. Condo

VII.     Closing Disclosure Replaces Settlement Statement:

          A.    Sellers Closing Disclosure/ Buyers Closing Disclosure

          B.    Recommended for class / case discussion

          C.    EXCEPTION- Cash sales can still use the standard HUD 1 closing paperwork

VIII.     Broker's Role and Impact on the Closing Process at the Following Stages:

          A.     Listing

          B.     Showing

          C.     Offer

          D.     Purchase and Sale Agreement

                a. Short Sale Addendum if necessary / if third Party Approval Required

          E.     Home Inspection

          F.      Bank Application and Approval

          G.     Bank Appraiser

          H.     Bank Attorney (Title Search)

          I.       Walk thru (Buyer Agent and Buyer)

         J.       Scheduling of Closing

                a. Utility Transfer

                b. Seller calls their Insurance Company to cancel

IX.      RESPA Concerns & Possible Violations

         A.    Suggested Handouts

               a. Loan Disclosure

               b. Closing Disclosure

         B.     Resources:

               a. CFPB website

               b. RESPA- FAQ

X.        E Closings

          A.    Currently considered a Hybrid closing in MA

          B.    Massachusetts does not recognize e-notaries

               a.  Wet print the notary docs and upload
















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