So you’ve at last secured the closing date on your new apartment in NYC. Give yourself a pat on the back you’re at the finish line. A few last things though remain such as the final walkthrough of the apartment and the closing statement. If this is your first home purchase, you may not be familiar with the last one. Read on to find out what it is and why it’s necessary.
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What is a closing statement?
A closing statement is merely a summary of the sale transaction which you’ll keep for your records. It’s written up by your real estate attorney in spreadsheet form and lists your closing costs for the purchase. What makes this an important document is that until it’s written up, you won’t have a specific figure for what your closing costs are. The problem with the closing cost figures provided by your buyer’s agent and the lender is that they’re only estimates. Until your attorney has prepared the closing statement, you won’t have an exact figure on what your final costs will be.
On closing day, a lot of checks will be exchanged, and it can get a bit confusing. The closing statement organizes everything, so you know where the money is going.
What does a closing statement contain?
At its most basic a closing statement will include the following:
- The names of the seller and purchaser
- The specific closing date
- The address of the property
- The closing location
Since most closings are postponed by a day or two, it’s important that the closing statement give the specific date. On the closing day, there will be some people present to finalize everything. Expect to see the following people:
- The purchaser’s attorney
- The seller’s attorney
- The purchaser’s lenders attorney
- The two brokers (usually, but not always)
- The title company
Once all are together, it’s time to exchange checks.
Checks to bring on closing day
Before closing day, confirm with your attorney what checks you need to pay and who they need to be made out to. These should be bank checks, also known as cashier checks. These can only be picked up directly from your bank. These are required because, unlike personal checks, they won’t bounce as the funds are withdrawn at the time the check is created.
Also, bring your checkbook in case there are any unforeseen expenses. It won’t exactly be ideal if your closing is held up because you are short $100.
What to do if you’re financing
If you are receiving funding for your purchase, there’s a good chance that you won’t need to bring any checks at all. This is the case if all your proceeds are already accounted for by other parties. For instance, your layer will have the down payment in escrow, and your mortgage lender will be there for the remainder of the funds. This is most common with buyers who are receiving gift funds or other wire transfers. Just remember to confirm with your real estate attorney first if whether this is the case. You can check this with them once you’ve received your closing statement.