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Home » Business And Finance Articles » Things Your Mother Never Told You Closing Costs

Things Your Mother Never Told You: Closing Costs

Buying or selling a home can be one of the most life changing decisions a consumer makes. Being educated about the real estate process and investigating things you don't understand is essential. Working with trustworthy and communicative real estate professionals is important. A lot of money is on the line when purchasing or selling a home, so be sure to ask questions when you need to about charges, fees or other issues.

You Gotta Have Faith!

Three days after an initial application has been submitted the lender must provide a Good Faith Estimate of settlement costs (GFE). The GFE is a list of closing charges and the HUD settlement statement you receive at closing is the confirmation of these charges. Carefully review the GFE costs and question anything you do not understand. When you receive the HUD statement the charges and fees should be familiar to you and reflect the GFE. There shouldn't be any closing cost surprises. If the GFE and HUD costs do not match these issues should be addressed immediately. Discuss the cost discrepancies with your REALTOR and a lender representative. Any costs not disclosed on the GFE can be argued against and removed from the HUD.

Closing Costs 101

The first page of a HUD shows the buyer what matters most, the exact amount due at closing. Charges associated with a loan are broken down into sections. Lender costs include fees for origination, discounts, appraisal, credit reports, underwriting and processing. Closing and title costs cover charges from the third party closing agent and for the title search, insurance and recording. Taxes will be listed and fees associated with the deed. The buyer may also create an escrow account holding prepaid funds so taxes and insurance payments are made on time by the lender each month. The REALTOR commission will also be listed, along with survey fees, if necessary.

Financial Responsibilities of the Seller

At closing, the seller also has financial responsibilities. The seller pays sales taxes and lawyer, titling and commission fees. If necessary the seller is held accountable for outstanding Home Owners Association fees, termite and moisture inspection charges and well water and septic testing. Repairs that need to be done to the property will be taken out of the seller's proceeds. Liens owed by the seller must also be paid, including tax liens. The seller must insure the home until the deed to the property is recorded a few days after closing. The buyer must have insurance activated on the closing date.

Invest and Save Money

Most homebuyers know that a down payment helps save money because it lowers the loan amount and mortgage insurance. This reduces the monthly payments. It also qualifies you for mortgage programs with better rates. Another savings tip is to pay your closing costs up front with the down payment. Avoid rolling the closing costs into the loan itself or the loan and interest increase. Without funds to cover the down payment and closing costs you will want to refinance later. Another important investment homebuyers should make is to work with a mortgage broker. A mortgage broker will shop for the best loan and interest rate. The knowledge a mortgage broker has can equal savings of up to $50,000 in interest charges. If you have credit issues or just want the inside scoop a mortgage broker is your best choice.

Completing the Transaction

The closing is an exciting day for both the buyer and the seller. The buyer should bring the GFE for reference during the meeting and request to review the HUD 24 hours in advance. This means you are prepared and comfortable with the completion of the real estate purchase. A third party closing agent and the REALTOR will be present. The loan officer or mortgage broker can also be present to answer any questions regarding the loan. Some companies, like Breakwater Mortgage in Virginia, require their brokers to attend. Companies like this can be better to work with since they are willing to be more involved. Now that all questions have been answered and the sale has been completed you can look forward to your new home and focus on the future!

And here is another random article you might be interested in...

Stop Sickies and Make People Happy At Work

If you're an employer or a manager then work place absence is costing you money, inconvenience, and upsetting your customers. And as we all know, not all days taken off work are due to genuine sickness. Many employees "take a sickie" because their morale is low and they just don't like or can't do their work.

The challenge for employers and managers is to make people happier at work. And if people are happy at work then they are less likely to take a day off every time they wake up with a stuffy nose. Some bosses think that paying more money, improving job security or working conditions is the answer. It isn't and it's also something that can be very hard to achieve.

People who employ or supervise other people need to become more tuned to their employees' emotional needs and find out what really motivates them. This is also much easier to achieve than paying more money or improving job security, however there is no quick fix. Some years ago I inherited a tele-sales operation with low staff morale and poor sales results. It took nearly a year to fix. The long-term benefits were of course worth it in terms of fewer days lost due to sickness and an increase in business. To reduce the number of sickies there are four steps you need to consider. Firstly, pick the right person for the job. There's a television advertisement running at present for a recruitment company. It highlights the fact that many people are in the wrong job for their skills and attributes. The daft thing is that it was an employer or manager who put them in the job in the first place. We need to get better at interviewing and selecting people. Take more time over it; pay more attention to the applicant's human side rather than their qualifications or experience. Get to know them better.

Find out what makes them happy, how well they get on with other people and how much energy and enthusiasm they have. Make sure they know what they're getting into and be sure the job suits them.

A manager in the telecom industry was telling me about an engineer who was taking too many sickies. He was being blamed for a poor attitude to his work. His job involved working in tunnels under the city repairing and installing equipment. Eventually it was discovered that the poor guy was claustrophobic and was trying to deal with it on his own. He still works for the same team but in a job that doesn't involve small spaces. It's not always easy to move people, which emphasises the importance of getting it right in the first place.

Secondly, you need to believe in your people. If you've interviewed well and picked the right person for the job then you need to trust them to do that job. You need to constantly demonstrate to your people that you trust and believe in them by what you say, your tone of voice and your body language. If you believe that your people are not to be trusted, that they're unable to make a decision without checking with you. That they'll turn up late and go home early, then that's exactly what they'll do. If on the other hand you believe that they'll do their job well, that they can be trusted to make decisions and they will give you a fair day's work, then it is more likely this is what you'll get. As with all theories there is no guarantee that it will work every time, however the majority of employees are reasonable people and if you treat them as such then they are more likely to behave in a positive manner.

The third and probably the most important thing you can do to motivate your people is to give them feedback and coach them. This is where so many employers and managers fall down in dealing with their people; we are hopeless at giving feedback. Many managers are uncomfortable telling staff how they feel about their work performance.

Most employees want to know how they are performing in their job; they want to know if they are doing it right or how they could do it better. If you really want to motivate your people then you need to give them feedback on what they're doing well and what needs improvement.

When you notice an employee doing something you do like, tell them about it. When you notice something you don't like, tell them about it.

Do it as soon as possible. Acknowledging a job well done is not much good six months later. Also, if you don't immediately call someone's attention to something you're not happy about, then they'll assume its okay. Either that or they'll think you didn't notice or you don't care. Do it in private. Why is it some managers still feel its okay to reprimand someone in front of their colleagues? Even the mildest rebuke can have a negative effect on morale.

When you do speak to the person use "I" messages. Say things like "I liked the way you did that" or "I'm unhappy with the way your reports are always late and I'd like your views on why this is". Avoid "You" messages such as "You're doing great". That can come across as patronising or insincere. "You're doing that all wrong" may cause conflict, lower morale and may not sort the problem.

Focus on one or two things. Don't run off a whole list of attributes or misdemeanours. Also be specific about job behaviour, focus on what the person did or didn't do, don't make a personal attack. Employees will feel happier if they perceive their employer or manager as a reasonable and fair individual - someone who is quick to praise but also says when they're not happy about something.

When we start to look at what motivates people at work, it's important to realise that we all have different needs. It's easy to fall into the trap of believing that all our staff are motivated by money. However, research conducted over the years into what motivates people at work suggests some other factors.

Money is important however people are more likely to be motivated firstly, by the work itself. Secondly, by being appreciated for what they do and thirdly by a feeling of being in on things.

The message is - if you want motivated staff then make their work interesting, give them feedback and give them the feeling that they're involved in the business.

We can make the job more interesting by giving people more responsibility, assigning projects and by training and developing them. We need to regularly give people feedback on how they're doing; focussing on what they're doing well rather than on what is not so good. To meet their need to feel involved we should regularly communicate both formally and informally. We could also involve staff in meetings they might not normally attend.

These steps will take time and thought however they'll make a huge difference as to how employees feel about their work. If they feel good and gain satisfaction from their work then they're less likely to find a reason to "take a sickie".