What to Do While Closing
- Relax. Avenue will handle most of the details of your closing.
- Check with your new lender about their requirements for proof of hazard insurance, including whether or not a master insurance certificate (if a condo) will be needed. In most cases, a termite inspection will also be necessary, and your real estate agent will assist with this process (note: some condos also need termite inspections). In most contracts, the seller has agreed to pay for the termite inspection as well as any damage repairs required prior to closing. Your agent should ask the seller’s agent to have the termite inspection arranged as soon as possible.
- DC, MD and VA no longer have antiquated Dower laws; a married person may now mortgage and sell property in their sole name without the consent of their spouse. However, if you are buying property with another person (married or otherwise) but only one of you is borrowing the funds (e.g. one person is on the Note), each person to be vested on the Deed must attend closing in order to sign the Deed of Trust that encumbers the property for the lien to be perfected. Please let us know as soon as possible if title is to be vested in the names of persons other than the borrower.
- Make sure that you have provided both Avenue and your lender with your complete legal name for title purposes. For example, if you use your middle initial, as opposed to your middle name, make sure both your lender and our office know about it. Also let us know how the buyers will take title (Tenants in Common, Joint Tenants, or Tenants by the Entirety). We can explain each method’s benefits to you in greater detail.
- If the property is a condominium, the seller is required to obtain certain documents for your review within ten (10) days, and certifications from the condominium association and to deliver those to buyer. Review your condo documents and the accompanying certificate carefully to be sure you understand the general and special assessments (if any) related to your unit.
- If this is not a condominium, we will require a survey, of which there can be many different kinds. Be aware that the survey we will otherwise order is cursory and will not verify boundary lines; your owner’s title insurance policy will take exception to boundary disputes. If you want a more thorough “boundary” survey (the cost is roughly $1,800.00 and the process takes 3 weeks) you must let us know in advance and the surveyor may require a deposit of 50% to begin the process.
- If you are the subject of any tax liens, court judgments, bankruptcy proceedings or mental competency proceedings, please let us know. We will find out regardless, and can help you explain these items to your lender in the best possible way.
- If you are over 65 years of age and want to apply for the D.C. Senior Citizen’s property tax exemption, please advise us accordingly. Buyers in DC who intend to owner-occupy their property and pay D.C. income taxes are eligible for the $73,350.00 “Homestead Deduction” when calculating their real property tax assessment. We will submit the application for you, and obtain a receipt for the filing. MD has a benefit for owner-occupied property, however, the county tax office will provide the application forms after the property has transferred. In FL, you are required to file a homestead application in person with the county tax office. If you have any questions or want to explore any of these programs further, please ask.
- Certain “low income” first time home purchasers in DC may be eligible for the “tax abatement” program, saving up to the 1.45% transfer and 1.45% recordation tax normally assessed, and exempting the property from the real property tax for five years or a reduced recordation tax rate of 0.725%. Qualifications are income and purchase price based. Call us if you believe you might qualify or if you know of any other programs you feel you may qualify for when purchasing.
- If the buyer is a corporation, a limited partnership or a limited liability company, please produce a Certificate of Good Standing at settlement that is no more than thirty (30) days old. In the case of a corporation, we also need certified copies of corporate resolutions authorizing the purchase and/or encumbrance of the property. Call us and we will explain how to order the Certificate. For any entity, whether it is a company or trust, we will require documents to prove signing authority prior to closing.
- What to bring to settlement: Sometimes we will not be able to give you an accurate answer of what you need to bring, until the day of settlement itself. You can use the enclosed worksheet for an approximation. You must bring a certified check to settlement in the amount of the worksheet total. You should also bring a personal check for any additional payment due, which we will calculate at the table. If you must send us a wire, the wire must be received and acknowledged by our bank on the morning of the day of settlement. Please call us for wire instructions. All funds and checks should be made payable to “Avenue Settlement Corporation” for residential closings and “Avenue Commercial Title Company, Inc.” if buying or refinancing a commercial property.
- There are two types of title insurance policies. Your lender will require a “Mortgagee’s Policy” that does not afford you — the buyer — any coverage. You should also obtain an “Owner’s Policy” of title insurance, which provides title insurance coverage to you for additional cost. If you are uncertain as to whether you should obtain an Owner’s Policy of title insurance, you are urged to seek independent legal advice. Because of the poor state of the land records maintained by the District of Columbia and other jurisdictions, all buyers in DC are strongly advised to purchase an owner’s policy.
- You should ask your lender to send you a copy of the appraisal for which you paid. You should tell them to include it with the loan documents. We in turn will include it with your settlement documents distributed at closing.
- Surely you want to deduct any “points” you pay to your lender from your taxes. The IRS has issued new regulations governing any such deductions. Check with your accountant if you have concerns or questions.
- A few days before settlement, a buyer should arrange for the utilities to be placed in the buyer’s name effective the day of closing. If you need assistance with contact information for any of the utility companies, please let us know.