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A closing statement is an accounting,
in writing, prepared at the close of escrow which sets forth the
charges and credits of your account. The items shown on the statement
will reflect the purchase price, the funds deposited or credited to
your account, payoffs on existing encumbrances and/or liens, the costs
for all services and a determination of the funds you are entitled to
at the close of the escrow. When you receive your closing papers,
review the closing statement; it is extremely logical and reflects the
financial aspects of your transaction. If anything does not make sense
to you, you should ask your escrow officer for an explanation.
When going through your closing papers,
examine all of them; there may even be a refund check hiding in there.
Cash the check quickly, please. Be sure to have the check properly
endorsed. All payees must endorse the check. This will eliminate the
check being returned unpaid due to irregular or missing endorsements.
Your closing statement and all other
escrow papers should be kept virtually forever for income tax
purposes.
Your accountant will need the
information about the sale or purchase of the property. IRS and other
agencies may require you to prove your costs and/or profit on the sale
of any property. The closing statement will assist in this task.
Do not rely on your escrow holder
retaining the escrow file so that you can "always call and get
copies of the closing statement." Most escrow holders will be
destroying the files after the statutory retention period, usually
five years. Maintaining and storing the closed escrow files is a
costly endeavor to the escrow holder. Therefore, a nominal fee may be
charged by your escrow holder for the retrieval of a file from
storage, photocopying the requested documents and returning the file
to storage.
Prepared by the Escrow
Institute of California, P.O. Box 5792, Orange, CA 92613-5792
(The information presented here was taken from a pamphlet prepared by
the Escrow Institute of California to be handed out by escrow
companies to their clients.)
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