Mistakes when you close on a home

Ask NJMoneyHelp

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Q. Over the years of buying and selling houses I have noticed errors on the settlement statement (HUD). In my last three closings — two with attorneys and one without — each had an error. Mistakes were the calculation of sales commission, the Home Owner Association (HOA) fees and property tax. In the big picture it wasn’t huge but more than $1,000 each time. How can buyers be sure the HUD is accurate?
— Home seller

A. When you’re buying or selling a home for hundreds of thousands of dollars, every penny does matter. We’d say mistakes worth $1,000 each time are worth giving some attention.

It comes down to doing the math, and then checking the math — even if you’re using professionals to help on the sale. Or, you could hire an accountant to do the math for you, said Ronald Levine, a Hackensack-based attorney.

“For example, get the tax bill and pro rate the full year’s tax by the number of days to do the tax adjustment,” he said.

The broker’s commission should match the listing agreement between the seller and the broker, he said.

If there are errors with the escrows for tax and insurance, while these are charged at closing, are credited to the buyer’s account. Any overcharge will result in a lower adjustment later on, so there’s no actual loss, Levine said.

“Charges for recording fees can be calculated from the county clerk’s website,” Levine said. “Recorded documents are charged at a per-page charge, so will vary depending on the number of pages of the deed and mortgage.”

We always recommend you use an attorney for a real estate closing. Even if you, as a buyer or seller, are experienced with closings, there’s a lot of fine print. It makes sense to make a small investment in an attorney to save you big headaches during the process.

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.