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WHAT IS
A CLOSING STATEMENT?
A closing statement is an accounting, in writing, prepared at the close
of escrow which sets forth the charges and credits of your account. The
items shown on the statement will reflect the purchase price, the funds
deposited or credited to your account, payoffs on existing encumbrances
and/or liens, the costs for all services and a determination of the funds
you are entitled to at the close of the escrow.
When you receive your closing papers, review the closing statement; it
is extremely logical and reflects the financial aspects of YOUR transaction.
If anything does not make sense to you, you should ask your escrow officer
for an explanation. When going through your closing papers, examine all
of them; there may even be a refund check hiding in there. Cash the check
quickly, please. Be sure to have the check properly endorsed. All payees
must endorse the check. This will eliminate the check being returned unpaid
due to irregular or missing endorsements.
YOUR CLOSING STATEMENT AND ALL OTHER ESCROW PAPERS SHOULD BE KEPT VIRTUALLY
FOREVER FOR INCOME TAX PURPOSES. Your accountant will need the information
about the sale or purchase of the property. IRS and other agencies may
require you to prove your costs and/or profit on the sale of any property.
The closing statement will assist in this task. Do not rely on your escrow
holder retaining the escrow file so that you can ". . . always call
and get copies of the closing statement;" most escrow holders will
be destroying the files after the statutory retention period, usually
five years. Maintaining and storing the closed escrow files is a costly
endeavor to the escrow holder. Therefore, a nominal fee may be charged
by your escrow holder for the retrieval of a file from storage, photocopying
the requested documents and returning the file to storage.
ESCROW AND YOUR NEW LOAN
If you are obtaining a new loan, your escrow officer will be in touch
with the lender who will need copies of the escrow instructions, the preliminary
title report and any other documents escrow could supply. In the processing
and the closing of the escrow, the escrow holder is obligated to comply
with the lender's instructions.
It has become a practice of some lenders to forward their loan documents
to escrow for signing. You should be aware that these papers are lenders
documents and CANNOT be explained or interpreted by the escrow officer.
You have the option of requesting a representative from the lender's office
to be present for explanation, or arrange to meet with your lender to
sign the documents in their office. |
