Rick Dulai

Real Estate Broker, Investor & Entrepreneur

Phone

(586) 997-9900

Closing Costs Explained

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There are a lot of things that go into purchasing your new home. As a result, your expenses can add up very quickly (especially, closing costs). However, the worst feeling in the world can be when you get your closing package.

You will almost always find that there are many fees and debits you likely weren’t expect.

I am going to solve that problem for you today. Knowing what types of charges will be on your closing documents will help you plan better ahead of time. As a result, planning ahead should hopefully provide with you the peace of mind you deserve.

If you have a loan officer helping you get a mortgage, your closing disclosure will cover most of your expenses. Regardless, I’m going to break down all of the credits and debits on the settlement statement from the title company that you can expect when purchasing your next home.

Credits

Under normal circumstances there are only really two major credits.

  1. Loan Amount – The loan amount is the amount the you as the buyer are borrowing from the bank to purchase the house.
  2. Seller Concessions – The seller concessions are the amount the seller is crediting to you. As a result, these proceeds of the sale go towards your closing costs.

Debits

Closing Costs Prorations/Adjustments

The buyer is charged these amounts to pay back the seller for amounts already paid. So, consequently that’s why they are pro-rated from the date of the closing.

  1. Association Dues – Any unused dues paid annually or monthly will be charged to the buyer and credited back to the seller.
  2. City/Town Taxes – This is also know as “summer taxes” in Michigan. You pay your summer property taxes in advance. They are due July 1st. Any unused amount is charged to the buyer and credited back to the seller.
  3. County Taxes – These are your “winter taxes” in Michigan. You pay your winter property taxes in advance. They are due December 1st.
  4. Title Charges & Escrow / Settlement Charges – The buyer is charged these amounts for services provided for the closing, along with the lender’s insurance policy is also included in this.
  5. Lender’s Title Policy – Your lender will require a Lender’s Title Policy or Loan Policy if you are getting a loan to purchase the home. This covers the lender from problems with the title.
  6. Settlement or Closing Fee – The title company charges the buyer this fee for actually closing their side of the transaction.
  7. Government Recording and Transfer Charges – These amounts are for the service of recording paperwork with the county. The title company is insuring the ownership of the property. Therefor, they also make sure that the ownership paperwork is recorded correctly.

Other Debits to Keep in Mind

  1. Record Warranty Deed
  2. Tax Certification
  3. Record Mortgage

Don’t hesitate to reach out to me directly, if you would like to obtain more information about what you can expect when it comes to your closing costs.

How to Setup a Home Search

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If you are ready to begin your home search journey, then you’ve come to the right place! Let’s go through how to prepare and setup your home search to most effectively find that perfect home for you.

The first thing you need to do is come up with a list of all of your “needs” and “wants”.

The goal is to get everything you need and want, but knowing the difference between the two can help you make better decisions along the way. You also will start to realize what truly is a “need” vs a “want”.

Once you have your list established. We can prioritize the “wants”. When it comes to searches (especially in databases), the MORE specific you are, the LESS results you will get. I always recommend starting with a broader search criteria and work your way down as you see what is actually avaiable.

Somethings to consider when setting up your search:

  1. Number of Bedrooms
  2. Number of Full Bathrooms
  3. Garage Size
  4. Do you need a basement? finished or unfinished?
  5. Square footage – this is typically a range like 2000-3000 sqft.
  6. Do you want a ranch style home? 2 story colonial?
  7. Do you want a first floor master suite? or do you want the whole family on the same floor?
  8. What size lot do you want?
  9. Are you only interested in new construction homes?
  10. How important is the school district to you? School districts can have dramatic effects on resale value even if you don’t have children yourself.

Sign up here on RickDulai.com to create your search profile and begin your home search. If you prefer, you can also contact me directly and I can setup a search for you to automatically email listings as they come on the market live.

Buying a Foreclosure

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I put this quick little video presentation together to give you some insight into the process of buying a foreclosure property. I hope you find it informative. If you are looking for foreclosure properties, just enter your email address in the box to the right over there and you will get immediate access to a live/updated list. As always, please contact me if you have any questions or comments. Enjoy!

Don’t forget to sign-up for your foreclosure list on the right!

7 Reasons to Sell in Winter

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This quick little video gives you some counter-intuitive information on why the winter really is a good time to get on the market if you’re ready!

As always, I am willing and able to help. So don’t hesitate to contact me below if you are looking for a professional with a TOTALLY different approach that is based on facts and numbers not tradition and the status quo!