Wednesday, August 25, 2004

Mistakes in escrow - quite common

I received a preliminary copy of the HUD settlement statement for the sale this evening. There are two mistakes in it. The first is rather minor; my fee for title insurance was $810. This is too high and my Realtor called and told them to give me investor's rates. We'll see tomorrow what that drops it to.

But the second mistake is, in my experience, very common. The contract states that I was to pay for the appraisal and the buyer would pay me back at escrow. The settlement statement does not show that. This is the second time in a year that I have sold a house and had this happen. Luckily, I kept a copy of my check and the letter to the appraiser. That could have been a $400 mistake. I called the company and they verified they received the check and deposited it, so it should be a simple matter to correct.

My overall estimate of the amount of money I would receive was off by only $500. And I was off on the low side! This is pretty good, considering all the various charges that get added on. Actually, I'll be getting even a little more back once the above two problems are corrected. When escrow has closed and the money is in my bank account, I'll post the final figures of this investment.

Anyway, let this be a lesson - always go over the HUD settlement statement with a fine tooth comb, preferably before you go in to sign it. Although details may be clearly spelled out in the contract, they might have been missed when transferring that data to the final statement.


misteropus said...

I totally agree with you (read HUD statement with a fine tooth comb). I had three mistakes each on both my AZ and OR homes that I caught myself.

Anonymous said...

In our case, a $3550.00 mistake was made in our favor. It was not detected until 3 weeks after closing and now the listing agent is trying to collect the amount from us. Do you know if the HUD is legally binding? In other words, if they didn't find the mistake at closing, are they out of luck?

Shaun said...

Interesting. I would think the HUD is binding. After all, both parties have to sign it. If anyone is to blame, it is the escrow company, so the listing agent should try going after them. I think the bottom line is you can keep the money. Your contract probably has a section of items that survive close of escrow and anything not listed there is final once escrow has been closed.

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