Estimated Closing Statement Requirements in Alabama Real Estate

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

When you are helping a buyer or seller with a home closing, there are documents that must be completed for a home closing. Learn what is required and how to complete a closing.

What Are Closing Statements?

You've worked with your client, Tina, for nearly two months to get her home sold. You are headed into closing today and want to verify the closing statements, the documents that finalize the sale of a property and complete the financing of a property.

As the seller's representative, it is your duty to ensure the documents are complete and correct. In Alabama, an attorney is required to complete the closing. The lawyer's office will prepare the documents and oversee the legal forms. Before you leave for the closing, your managing broker takes a moment to review the paperwork you will be reviewing.

Estimated Closing Statements

While each closing may have unique or specific documents outside of the norm, there are typical statements that are completed in the closing process. The forms your broker specifically discusses include:

  • Copy of the signed contract with all addendums
  • Contact information for buyers, sellers, realtors, lenders, bankers, and all other appropriate parties
  • HOA guidelines, if applicable
  • Loan documents showing payoff information for the seller and mortgage documents for the buyer
  • Survey and home inspection
  • Home warranty information, if appropriate
  • Existing mortgages, powers of attorney, wills, deeds, and trusts
  • Disclosures provided by the sellers
  • Any receipts or proof of required repairs
  • The title search verifying that there are no liens or assessments on the title of the property

Closing Proceedings

All of the deadlines were met along the process of purchasing the home. Therefore, you are ready to close today. You will attend the closing with your client, along with the buyer and the buyer's agent. You agree to meet at the attorney's office to review the documents, sign the papers, and complete any outstanding tasks.

Before you leave, you call Tina and remind her to bring her driver's license and Social Security number for identification purposes. The buyers will also need their drivers' licenses, Social Security information, certification of funds or proof that the funds have been wired, and notarized power of attorney, if needed.

Good Faith Estimates

When the buyers applied for the loan for Tina's home, the lender provided them a good faith estimate, or loan estimate, the anticipated total of the closing and applicable charges relating to the purchase of the home. The estimate is not the exact or final amount the buyer will pay, but it gives a very good idea of what costs will be assessed when the home is purchased.

The loan amount is relatively easy to figure out. The closing costs, the variable costs such as closing documents, inspections, and earnest money deposits, will be appropriately applied to the sales process. These costs and payments will be accounted for and added or subtracted from the loan amount to come up with the total financed amount.

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