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| Frequently Asked Questions | |||||
What is a Closing Statement?A closing statement is an accounting in writing, prepared at the close of escrow which sets forth the charges and credits of your account. The items shown on the statement will reflect the purchase price, the funds deposited or credited to your account, payoffs on existing encumbrances and/or liens, the cost for all services, and a determination of the funds you are entitled to at the close of the escrow. When you receive your closing papers, review the closing statement. It is extremely logical and reflects the financial aspects of YOUR transaction. If anything does not make sense to you, you should ask your escrow officer for an explanation. When going through your closing papers, examine all of them; there may even be a refund check hiding in there. Please, cash the check quickly. Be sure to have the check properly endorsed. All payees must endorse the check. This will eliminate the check being returned unpaid due to irregular or missing endorsements. YOUR CLOSING STATEMENT AND ALL OTHER ESCROW PAPERS SHOULD BE KEPT VIRTUALLY FOREVER FOR INCOME TAX PURPOSES. Your accountant will need the information about the sale or purchase of the property. IRS and other agencies may require you to prove your costs and/or profit on the sale of the property. The closing statement will assist in this task. Do not rely on your escrow holder to retain your escrow file so that you can always call and get copies of the closing statement. Most escrow holders will destroy the files after the statutory retention period, usually 5 years. Maintaining and storing the closed escrow files is a costly endeavor to escrow holders. Therefore, a nominal fee may be charged by your escrow holder for the retrieval of files from storage, photocopying the requested documents, and returning the file to storage.
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All Rights Reserved. |