REAL ESTATE CLOSING HOMEWORK
September 23rd, 2009 categories: Buying
At last–the big day, you are closing on and getting the keys to your new home! The closing table can be a hurried and harried place with dozens of pieces of paper being circulated for initials and signatures. It is a good idea to think ahead a bit. Here are a few things that can happen at or near closing that you can be prepared for:
- The seller may need to occupy your new home after the closing. This can happen for a variety of reasons. Perhaps there is a delay in the closing of their new home–perhaps their financing has been delayed (not uncommon today)–at any rate they want to stay after closing. Of course you want to be Mr. or Ms. Nice and agree to the extra time if you possibly can. First, you need to charge enough rent to cover your PITA (principal, interest, taxes, assessment). It seems to me that a significant amount of money should be put into an escrow account to motivate the sellers to leave ASAP and to cover any damage to the home. Also, do an inspection before giving any money back to be sure that your new home has been left jut like it was when you did your final walk through.
- Some closing costs are deductible. Points, pro-rated mortgage interest and pro-rated property taxes are deductible. Some of the closing costs are not deducible but can be added to your home’s adjusted tax basis to reduce tax liability when you sell. Be sure you keep good records and hang on to your RESPA for dear life–your accountant will need it when you sell to find out which specific deductions will apply at that time.
- Think about a home-protection plan to cover major systems. Sometimes a seller will provide a plan or will share the cost with you. This is an especially good idea if you are buying an older home.
- Ask your Realtor about any questions you may have about closing.
Hopefully this advice will help you get through your closing unharried and unhurried!
Here are a couple of posts that will help you come through your closing unscathed:
Record Keeping 101 For Homeowners
First Time Buyer Down Payments
This entry was posted on Wednesday, September 23rd, 2009 at 1:18 pm and is filed under Buying. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
