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I'm preparing to close on a house next week, and I'm trying to work out in advance the exact numbers, mostly so I am prepared in advance but also so I know how much I will be wiring from my bank account so I can get things ready.

Let's just say that (after taxes and loan fees and title fees etc) the house costs 200,000; but (since this is Illinois so property taxes are paid in arrears) that the seller will be paying 10,000 towards the 2021 property taxes, and that the lawyer charges 1,000.

Will I be:

  1. Wiring 191,000 to the title company's escrow account, with the lawyer taking 1,000 out of that and the seller taking the rest,
  2. Wiring 200,000 to the title company's escrow account, then getting a check from the seller/writing a check to the lawyer on the day of closing,
  3. It depends and I won't find out until the day before.
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    Generally the title company will prepare a final statement a day or two in advance of the closing so that the parties both know what is needed and so you can arrange the funding to be delivered to them in time for the closing. My advice would be to contact the title company directly.
    – jwh20
    Oct 22, 2021 at 14:45
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    But the usual practice is that you pay all funds to the title company and they split out as appropriate to those who are receiving. If there are any "side" transactions that don't go through the title company's closing, that's on you.
    – jwh20
    Oct 22, 2021 at 14:47
  • Ask for the HUD-1 form from the title company. hud.gov/program_offices/administration/hudclips/forms/hud1
    – user662852
    Oct 22, 2021 at 16:15
  • There are a ton of other charges. You need to see what the final reckoning is. Recording fee, homeowner's insurance, title insurance, a-fee-because-we-can-fee...
    – mkennedy
    Oct 22, 2021 at 17:18
  • @jwh20. Thanks. Hopefully the Title company doesn't waits until the last second to tell me where to wire a huge amount of money --- various online banks take 24-48 hours to process wire transfers. Oct 23, 2021 at 1:47

2 Answers 2

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One of the roles of the title company/attorney is to coordinate all the funds during the transaction. They calculate who is supposed to bring what, and it what form, and how the funds are to be distributed.

Because some numbers depend on the exact date of settlement (taxes, mortgage payoffs, initial payments) there are times that they ask you to bring a checkbook to cover some last minute adjustments.

Normally the bulk of the funds will be sent from one source. In the case where there is a mortgage, it would be the lender. If there is no mortgage then the funds come from the buyer.

If the seller has a mortgage, some of the money will never touch the sellers hands. They will be sent directly to the existing lenders.

Some funds go to lawyers, real estate agents, and the local tax authorities. Some funds could go to the fire insurance company, appraisal company, and title insurance company.

The initial estimate for these things should have been given to you as part of mortgage application process. If you aren't getting a mortgage the title company would be the source of the initial estimates, and the final numbers, and accounting.

Hopefully the Title company doesn't waits until the last second to tell me where to wire a huge amount of money --- various online banks take 24-48 hours to process wire transfers.

They should provide you with the numbers you need. If you have a requirement of x days to get the money to them, you need to let them know. You also need to be sure that your plan to wire the funds will meet their requirements. Talk to them, you are paying them for this service.

In my experience, but to be honest I haven't bought or sold a house in more than a decade, I wouldn't want to initiate a transfer of funds before I was sitting at the final settlement table. I have known from personal experience that settlement dates can slip. Sometime the slip is only a day or two, other times the whole deal falls through. I had one buyer decide the perfect time to get a new car was a few days before buying my place. There went the cash they were supposed to bring to the table.

I had a family member lose a house because one person a chain of transactions realized they wouldn't have enough cash to make their next purchase. They misremembered their mortgage balance during the negotiation, and didn't realize their mistake until the day of settlement. That took weeks to unwind the situation.

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  • Thanks, this is useful. Concerning: "I wouldn't want to initiate a transfer of funds before I was sitting at the final settlement table" --- I think that points to one of my confusions: I was imagining that if the Title company hasn't already received my part of the cash by the time I am at the settlement table then it doesn't happen. In this case the seller has no mortgage and the buyer (me) is paying >50% or so in cash. Oct 24, 2021 at 16:23
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...but also so I know how much I will be wiring from my bank account so I can get things ready.

Generally the title company will prepare a final statement a day or two in advance of the closing so that the parties both know what is needed and so you can arrange the funding to be delivered to them in time for the closing. My advice would be to contact the title company directly.

Let's just say that (after taxes and loan fees and title fees etc) the house costs 200,000; but (since this is Illinois so property taxes are paid in arrears) that the seller will be paying 10,000 towards the 2021 property taxes, and that the lawyer charges 1,000.

The usual practice is that you pay all funds to the title company and they split out as appropriate to those who are receiving. If there are any "side" transactions that don't go through the title company's closing, that's on you.

Hopefully the Title company doesn't waits until the last second to tell me where to wire a huge amount of money --- various online banks take 24-48 hours to process wire transfers.

They know that and will give you the needed information far enough in advance. If not, then your closing will be delayed and they won't get paid on time. But it doesn't hurt to talk to them and make sure they know that.

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  • I hope so. I did ask the closing company one question and they rather stroppily told me to ask my lawyer instead. (All these questions I should be able to ask my lawyer of course but they are less competent than I had hoped.) Oct 24, 2021 at 16:24

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