Another recent question to The Underwriter: ďWhatís a sellerís statement? Is it the same as a HUD-1 Settlement Statement?Ē
Answer: They are similar documents, but not actually the same thing.
The HUD-1 Settlement Statement is a Federally mandated form that must be provided at closing, accurate as to all monetary exchanges, and signed by the buyer, seller and Title, Escrow, or Closing Agent. It is absolutely required for any transaction involving a loan to buy the property.
A ďSellerís StatementĒ is more of a worksheet prepared ahead of the closing to calculate all the incoming and outgoing cash for the seller. It is often prepared by the Realtor and given to the Title Company to incorporate into the HUD-1.
The items typically found on a Sellerís Statement are Sales Price, any money agreed upon for personal items to be left in the house, and anything else that could be considered money coming TO the seller. Then the list of expenses is shown so that sellerís proceeds can be calculated.
Typical expenses to sell include the mortgage payoff, which may or may not include a refund of the escrow account. Most mortgage payoffs have one more monthís interest than you were expecting because when you make your monthly payment, youíre paying last monthís interest. Most escrow accounts are not refunded until approximately 30 days after payoff.
The Realtorís commission will be listed on the expense side, as well as prorated property taxes to the buyer or if bills are due, the actual tax bill. The water and other utilities may be prorated if they are being transferred, otherwise a final reading and bill will be done at the last minute.
What else? If your State, County, or City has transfer taxes, the charge will be listed. These are sometimes Stamps that are affixed to the deed. Donít forget that the deed has to be prepared, probably by an attorney. These fees are typical and streamlined in most parts of the country, so your Realtor can advise you upfront how much you can expect.
If you have outstanding liens on the property, they will have to be paid off at the time of closing. The Title Company or the Realtor may be able to get the payoff figure for you if they provide that service. Some areas of the country require an Attorney be included in the transaction. It is highly recommended that you also purchase Title Insurance, even though the majority of the cost falls to the seller.
Did the contract call for a Home Warranty? Maybe the buyers loan requires a termite inspection that you agreed to pay for. These miscellaneous items can add up quickly, but your biggest concern should be knowing well in advance what to expect so you donít commit more dollars from the sale than youíre actually going to get.
If you would like to estimate your costs, look for the Buyer/Seller Tools category on this site. There is a calculator for estimating proceeds. There is also a company that lets you compare Realtors anonymously.
Copyright: Judi M Moore, 2rhouse.org, August 30, 2005, all rights reserved