Closing on Your New Home

The big day has finally arrived – you are closing on your new home! In South Carolina, real estate attorneys manage the closing transaction so the meeting takes place at the attorney’s office.

Typically, the buyer and seller, along with their agents, attend the closing. Most of the meeting is spent with the buyer reviewing and signing a stack of paperwork (which the closing attorney will explain). The seller is there primarily to turn over the keys – and may come towards the end of the closing.

HUD-1 Statement

One of the main closing documents is the HUD-1 statement, which is essentially a balance sheet that lists the selling price of the home, your down payment, and your mortgage amount. It also lists the costs associated with closing the home for both the seller and buyer (see the Closing Costs section below).

Closing Costs

Below are some of the typical closing costs paid by the buyer. There may be some variation depending on your lender’s fees, the type and location of the property you are purchasing, and local taxation practices.

• Attorney’s Fee
• Appraisal Fee
• Loan Origination Fee
• Credit Report
• Interim Interest
• Home Inspection
• Underwriting Fee
• Recording of Deed Fees
• Title Insurance
• Title Examination
• Home Owner’s Insurance
• Set up of Escrow Accounts for Taxes and Insurance
• Flood Certification
• HOA Fees (if applicable)

Buyers may ask the seller to help with their closing costs. Asking for assistance with closing costs is largely driven by market conditions. In a buyer’s market, sellers are more likely to cover some or all of the closing costs. In a seller’s market, buyers are less likely to receive much, if any, closing costs from the seller.

Title Insurance

Before your home closes, a title search is done on the property. A title insurance company completes extensive research into relevant public records, maps, and documents to trace ownership of the property and determine if anyone other than you has an interest in the property.

Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing. Once the title is “clear,” a policy is issued. The premium is paid once, usually by the buyer, as part of the closing costs that appear on the HUD statement.

What most buyers do not understand is that standard title insurance only protects their lender against mistakes made in a title search. The policy does not protect the buyer. If you, as a buyer, want the same peace of mind, you also can get title insurance. Without your own policy, you would not be protected from a title problem.