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"Closing" refers to the
meeting where ownership of the property is legally transferred
to the buyer. It is a formal meeting in which most parties
involved in the buying/selling process will attend. Closing
procedures are usually held at the title company's office or
lawyer's office. Your closing officer coordinates the document
signing and the collection and disbursement of funds. Your
agent will generally be present at your closing to read the
documents on your behalf, answer any questions, or help to
resolve any last minute or unexpected details that may come
up.
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In order for the closing to go
smoothly, each party involved should bring the necessary
documentation and be prepared to pay any related fees (closing
costs). There may be more than one form of acceptable payment
for your closing costs so ask the closing officer which form
of payment will be required and to whom it should be made out.
Closing costs will generally total an amount equal to 2 to 3
percent of the total loan value not including down payment and
the buyer's escrow account.
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Sellers sometimes pay for a
portion or all of the closing costs, depending on local market
conditions, terms of the purchase contract, and the seller's
cash and timing considerations. Any such concessions should be
acknowledged in writing. Most lenders will allow a credit from
the seller to the buyer for the non-recurring closing costs.
However, they usually won't allow a credit that reduces the
amount of the buyer's down payment or any of the buyer's
recurring costs, such as expenses for fire insurance premiums,
PMI, or property taxes.
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