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Closing on your new home
The sales contract defines the basic terms and conditions of your agreement to buy a home. It includes the sale price, property description, deposit amounts, mortgage financing and any contingencies that might rescind the contract.
Practices vary from state to state, but counter-offers that are subsequent to the contract's stated sale price are usually appended to the contract.
The sales contract also includes the terms for the loan closing, or settlement. Table 1 is a checklist of some of the major items that should be included in the contract. Table 2 is a checklist of major closing costs.
The Real Estate Settlement Procedures Act (RESPA) governs the loan application and closing process. RESPA ensures that homebuyers receive timely notification of closing and other costs. These disclosures begin when the homebuyer applies for a loan and continue after closing.
Table 1: Major items in sales contract
| Sale price |
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| Property address and description |
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| Amount of initial deposit |
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| Terms of mortgage financing |
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| Details for loan closing |
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| Transfer and recording of deed |
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| List of fixtures remaining in home |
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| Repairs required of the seller |
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| Disclosure of easements |
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| Details of sales commission |
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| Details of escrow transaction |
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| Pro rata share of real estate taxes |
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Table 2: Major closing costs
| Amount of first loan payment |
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| Loan underwriting fees |
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| Amounts for insurance premiums |
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| Amount for escrow reserves |
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| Fees for legal services |
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Fees for escrow services |
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Fees for title-related services |
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Fees for recording services |
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Next Topic: Deciding to buy or rent
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