In a real estate transaction, the closing expenses are generally paid by both parties. According to the statutes in Texas, there are certain things for which the buyer must pay, and other things for which the seller must pay. The type of loan that will be used determines what portion of the costs should be paid by the different parties. For example, the buyer pays for a title policy because it is in his or her favor to make sure they have a good title. Title policies are sometimes big expenses but are well worth it because they provide security in knowing that you have a proper title to the property. In some cases, closing expenses can be negotiated. For example, if the buyer falls short by $2,000, the seller may agree to just pay it rather than stop the entire proceeding and lose the sale of the property.
You will need mortgage insurance prior to the closing if you have not put down a certain amount for a down payment. In the past, if you did not pay 20 percent of your total sales price down, then you would have to pay for mortgage insurance. Title and mortgage companies think that if you pay 20 percent down, then you have a vested interest in the property and will not try to get out of it by failing to pay. However, there are some mortgage companies who will sometimes accept 10 percent down. Additionally, most mortgage companies require a buyer to obtain insurance on the home, i.e. flood, fire and liability.
An experienced and knowledgeable attorney will understand the documents, be able to prepare them properly, and therefore ensure that the closing goes through successfully. If there are any questions about the documents that the title company cannot answer, which is rare, then the attorney can step forward and answer them. Sometimes an attorney will not even talk very much at a closing, but simply having one on your side will provide the confidence that things will go smoothly.
The attorney fees are paid by whoever brought the attorney. In other words, if you want to have an attorney at your closing, then you will pay for it.
In the past, closings could take a very long time because everything had to be explained to each party, and there was a ton of paperwork involved because everyone wanted to be protected. Nowadays, more people have bought properties before and are therefore not as naïve to the process as they used to be. In most cases, a closing will only take about an hour.
I would suggest contacting your attorney when your realtor first sends you copies of the documents. That way, the attorney will have sufficient time to review and make sure that everything has been done properly. If you wait until the day before the closing, the attorney might not have sufficient opportunity to ensure that everything is okay.
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