The beauty of “balance”
Every wonder why the word the word “balance” is used on some some contracts?
Here are two good reasons using the word “balance” is a great practice:
- By not specifying a dollar amount on the “balance to close” line, the focus is instead on the deposit amount and the % for financing (if any). Then as negotiations progress, and the price changes or is affected in other ways, i.e. seller contributions, credit for repairs, etc., the loan amounts or cash balance to close does not need to be recalculated and re-initialed by all parties.
- Buyers often misunderstand the “balance to close” amount when written in as a dollar amount, as all they need to bring to the closing in “cash to close”. This is inaccurate, as there are additional closing costs such as title insurance, settlements, lender fees, mortgage recording taxes and recording costs.
The Closing Company, Inc. is a full service title, escrow and settlement agency licensed and bonded in the State of Florida. Our services include refinance, purchase, private lending legal representation, lender document review, real estate law and litigation and real estate document preparation. We assist clients in navigating the complicated and risky real estate market with solid legal and title expertise. For more information, please contact info@theclosingcompany.net or 305-271-0100 x701. The Closing Company, Inc. is an agent for Old Republic Title Insurance and Fidelity National Title Insurance. The company also received the most desirable rating of “low risk” from Secure Settlements, Inc., a national vetting provider for lenders.
Disclaimer: The Closing Company, Inc. is not providing legal, estate planning, tax or investment advice. Please consult with a licensed Attorney for legal advice or before signing any legal documents. Please consult with a CPA for tax advice or planning.
