Closing Statement Tips
Closing statements often feel like a formality, but having an experienced attorney closely review them can save you thousands of dollars. Our Real Estate Attorney team has personally saved clients over $10,000 at the closing table. This is why it’s so important to have an attorney in your corner, that’s money that could go directly back into your pocket.
Tip #1: Settlement Statements
On settlement statements, you’ll want to review the prorations. In Michigan, prorations follow what is agreed to by the parties in the purchase agreement. This is another reason why it’s important to have an attorney draft your documents.
There are several different ways to prorate property taxes: In Advance; In Arrears; Calendar Day; Due Date Basis; etc.
Many believe that local customs govern prorations, but that’s not necessarily true.
Tip #2: Check Details on the Deed
Check for spelling errors, dates, amount of consideration, etc. If not correct, this could create title problems down the road and the deed is not recorded. It could be costly to correct those mistakes later on.
Tip #3: For Apartment or Large Commercial Properties, check if Splits are Correct
Review purchase agreement splits on things such as transfer of security deposits, utilities, electricity bills, prepaid rent, and rent paid after closing. Also, you’ll want to make sure these splits are updated to the closing date. Often, you’ll have a closing date decided weeks before closing, the closing date may then change, and the splits will not be updated.
Tip #4: Additional Agreements
This tip is pretty simple. Check that additional agreements of parties are signed and included in closing documents. Examples of these are bills of sale, assignment of rent, etc.
Experienced Real Estate Attorneys | Fausone Bohn, LLP
If you are a real estate investor or are purchasing your own residential property and have legal questions, we here at Fausone Bohn, LLP can help. Call Business and Real Estate Attorney Robert C. Pollock at (248) 912-3213 or send an email to receive a free consultation.