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Statistics say that 85% of settlement statements (HUD-1) are NOT correct.
It will put a lot more money in your pocket if you request the settlement statement BEFORE closing so you have plenty of time to look it over and bring any problems to the closing attorney’s attention
My daughter is closing on a wholesale deal tomorrow. I wrote the contracts on the buy and sell side so I knew what needed to be hud-1
There were errors on both the buy side and the sell side.
The result of me finding this now is an additional $1298 in my daughter’s pocket!
And not just the HUD-1 — read the title policy too.
Just because a title policy is issued it does not mean that it does not have exceptions that you would not want to live with.
That’s what happened on that other house I was going to buy at the lake. There were two judgments against the house (1) because there was a shed with a metal roof.
The judgment was written so bad that it did not even have a $$ figure – it would just stay with the property until the metal room was replaced with a composition roof and (2) no one can even figure out what the other judgment is.The judgments showed up as exceptions to the title policy.
I’m not going to buy a house and inherit two judgments.
The exceptions also reveal who has easements, mineral rights, etc. etc…
So read those title policies too.
Most standard contracts have a certain # of days you can “object to” what’s in a title policy and get out of a deal if you don’t like the exceptions. You can easily add that feature to any contract you use.
Love those HUD1 errors as they almost always put $$$$ into my pocket, however only when I catch them!!
And, not all the HUD1 errors are in the $$$$ sections. I make sure the HUD1 names how I want to buy the property. In my case I almost always take title into a Land Trust – since the closing companies I use only have a couple clients that use Land Trusts, they usually default to a company name which I have to get corrected. Although the HUD1 is not on public record, it’s a paper trail that I prefer to keep clean by naming the trust as the Buyer.
The best way to insure that you’ll catch as many errors as possible is to always get the settlement statement the DAY BEFORE closing so you have plenty of time to look it over and are not pressured for time with a seller or buyer sitting next to you at the closing table.
If the title company can’t get the HUD-1 to you the day before your closing is scheduled, then it is really better to postpone closing so you have 24 hours to look over the documents.
that one day delay could put an extra $1298 (or more) in your pocket – just like it did for my daughter.
If you’re not sure what you’re looking at with the HUD-1 – ask the title company to explain it to you line by line BEFORE closing or get on the forum and ask for help.
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