Now that you have some idea of what goes on at a closing, I will give you an Idea of what a Hud 1is. When ever you do a transaction where money and property changes hands. You need a tally sheet in order to keep track of the money. The Department of Housing and Urban Development, decided it would be best if a standardized form was used for all Real Estate transactions, hence the HUD 1. Until you receive a recorded deed, this documentrepresents the final sale of the property from seller to buyer. It is also used as a record of all costs incurred for income tax purposes. You take all of the charges to the seller and put them in one column and the buyers in the other column. Then you put the sellers credits and the buyers credits in the next set of columns. Prorated items are next and after some basic arithmetic you have the amount the seller will receive and the buyer will pay, ( in most cases ). There is a lot more to it and i don't want to over simplify, but this is what the form basically is. Next blog. Buyer costs.
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