The Closing Process

The period of time between when the purchase agreement is signed and when the sale is finalized is called the closing period. This can last anywhere from 30-90 days depending on the terms of the purchase agreement. Below is a detailed description of the items that we take care of for you during the closing process.

Abstract of Title An abstract of title is the condensed history of title to a particular parcel of real estate. It consists of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate. The seller is required to provide an updated and extended abstract of title. This is done by a local abstract company and typically costs in the ballpark of $250.00.

Deed Preparation A Deed is an official document showing the change in property ownership. A deed can only be prepared by a licensed attorney who typically charges a flat fee around $40.00.

Tax Proration Iowa operates on a fiscal year of July 1 to June 30. Real estate taxes which accrue during one fiscal year are due and payable in the following fiscal year. Since taxes due and payable in the fiscal year are a lien against the property, they must be paid in full in order to provide marketable title to the buyer. Therefore, a tax proration is due to the buyer for the time the seller lived in the property from July 1st of last year to the day of the closing.

Iowa Real Estate Transfer Tax This tax is imposed on the total amount paid for the property. The tax is paid to the county recorder in the county where the real property is located. The calculation is based on $1.60 per $1,000, with the first $500 being exempt.

Wire Transfer Fees If a seller needs the funds from the sale of one house in order to buy another, they may be expected to pay a wire transfer fee of the purchase price into their account for the loan payoff. This is usually a flat fee around $15.00.

As you can see the seller's closing costs can range depending on the value of the home and the time of the year that the home is sold. In addition, there may be other less common fees depending on each unique situation.