In his or her research regarding the title, the lawyer might discover judgments or liens against people with names similar to yours or the seller's. If that happens, the lawyer may require proof that you are not the person with the judgment or lien. He or she will usually also require name affidavits, in which you state, under oath, that you are a different person than the one who has a lien against him or her.
Most states allow repair or construction people to file liens against property for unpaid services. As a result, the closing attorney will ask the seller to sign forms saying that there have not been any repairs within the last six months or so (depending on your state's time limits), or that all repairs have been paid in full. You, as the buyer, will have to sign a lot of forms agreeing that everything possible has been disclosed to you, you have read every single page of every single document, and you have no unanswered questions.
FIRPTA is short for Foreign Investment in Real Property Tax Act. Congress was concerned that foreign sellers would sell their property and then not pay any income taxes on the sale proceeds. As a result, it required that buyers withhold 10% of the purchase price and pay it over to the IRS.
The seller could then apply to the IRS for a refund, if one was due. This caused an incredible number of headaches, however, so the IRS allowed a huge loophole. If the buyer signs an affidavit saying the purchase price is less than US Dollars 300,000 or the buyer currently has steadfast plans to live in the property at least 50% of the time, then no one has to fool with the IRS withholding issues.
The settlement statement shows all money paid at closing and how it was disbursed. It itemizes all credits and all debits for both the buyer and the seller. For home purchases, the form that is used is specified by federal law. It is called a HUD-1. Because all closing software works well with the HUD-1 form, most closing companies use it even for commercial loans.
The HUD-1 form is printed on legal-sized paper with small print. You can find samples on the Internet, such as on the website of the U.S. Department of Housing and Urban Development. It includes links to and instructions for completing a sample form.
The title company or closing attorney will almost always record your deed for you. That is because they are writing the title insurance, and it is in their best interests to make sure your deed gets recorded before any possible judgment or lien against the seller.
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