Real Estate Principals and Practices

Instructor: Jan E. Beran, Esq.


My office address, phone and fax:
3940 Cornhusker Hwy., Suite 200,
Lincoln, Nebraska 68504
Phn: (402) 466-7110
Fax: (402) 466-1950
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(beran@aol.com)
| Course Description and Syllabus | Index to Course Materials |
Closing the Real Estate Transaction
  1. Settlement Statement ("T" accounts worksheet)
    1. For Seller items, entries must answer the questions:
      1. COSTS/Debits: Does this decrease the sales price?
      2. Credits: Does this increase the sales price?
    2. For Buyer items, entries must answer the questions:
      1. COSTS/Debits: Does this increase the purchase price?
      2. Credits: Does this decrease the purchase price?
    3. For Balance T account, entries must answer the questions:
      1. Do debits and credits in Seller and Buyer T accounts balance?
      2. If No and Debit balance in either Seller or Buyer, then item is a liability (credit) for the balance account.
      3. If No and Credit balance in either Seller or Buyer, then item is an asset (debit) for the balance account.
      4. If Yes then no entery is necessary.
  2. Usual and customary closing expenses. (See table)



Seller Buyer Balance
Description Debit Credit Debit Credit Debit Credit Comments
Purchase/Selling Price x x
Earnest Deposit 1 x x Normally in hands of escrow agent
Buyer's bank financing x x
Pay-off of Seller's financing x x
Assumption of Seller's financing x x
Abstracting x x
Title Opinion x x
Title Insurance (split 1/2 each) 1/2x 1/2x x
Seller carryback x x
Taxes paid in arrears: Current year x x Per diem rate times number of days which seller owned
Taxes: Previous year x x
Taxes paid in advance: Current year x x Per diem rate times number of days which buyer owns
Documentary tax x x $1.75 per thousand of selling price or any part thereof
Recording fees: Deed x x $5.00 per page + .50 per lot
Recording fees: Financing Documents x x Same fee as above
Recording fees: Release of Mortgage (seller) x x May also have clearing title documents
Home Owner's Insurance x x May be paid outside of closing (poc)
Inspections (Termite, HVAC, Structural) x x
Repairs x x Most often limited to certain $ amount by Purchase Agreement
Repairs, excess of limit x x Any excess which buyer agrees to pay
Survey x x
Appraisal x x If required by bank.
Current tenant's rent paid in advance x x
Current tenant security deposit x x
Early move in Rent unpaid x x Prorate number of days
Early move in, rent prepaid x x Prorate refund
Attorney fees (b=buyer's s=seller's) s b s+b
Broker's commission x x Usually a % of sales price.
Buyer's agent fee x x Normally buyer agent shares seller's agent commission unless otherwise agreed
Loan origination x x Often collected by bank prior to closing
Points (b=buyer's s=seller's) s b s+b Depending on market, seller may have to pay points
Escrow agent (closer's fee) 1/2x 1/2x x
Escrowed amounts for water bill or repairs x x Any fee which is unknown at time of closing will be escrowed
Subtotals*
Balance due to Seller x x
Balance due from buyer x x
TOTALS XX XX YY YY ZZ ZZ

Footnotes:
1 In the rare case where earnest deposit is held by seller appears as a debit (cost) to the Seller.
* Debits will not equal credits on this row. On balance due row, enter amount to equalize each T account and make corresonding opposite entry in balance account.
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| Index to Course Materials | Course Description and Syllabus |


For more information, please contact beran@aol.com

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