NinjaPigeon - My Flight to Financial Independence

Thursday, July 27, 2006

Losing money during your home sale

There is more money that changes hands when you sell your home besides what is on the HUD-1. The most notable of these includes the balance of your escrow account. Luckily, the mortgage companies will automatically send this check to you. But you'll still want to perform your own due diligence to make sure you collect all the money you are due.

I recently sold my first home, so wasn't sure what to expect. While there are less papers to sign at the closing table, there are still many things to take care of. One of the big ones is calling your mortgage company and telling them your new address so they know where to send the escrow check! While a mail forward at the post office will probably catch this, it's not something you wanna take chances on. Furthermore, the mortgage company can tell you how much the check will be even if you won't see it for several weeks. Balance of my escrow account? A cool $912.33.

Another source of money, and one that I didn't consider, was the balance of my home insurance premium. Since they are billed annually out of your escrow, you often don't even notice when they get taken out. Well, mine got paid about a month prior to the sale. So when I called recently to notify the insurance company that I had sold the home, they told me I'd receive a refund for the remaining time on the policy. They even said they'd prorate it based on the day of the sale if I could show proof of it by faxing over the first page of my HUD-1. That value of my premium? A nice $435 that I almost lost because I didn't know I could get my it refunded.

Finally, you'll want to call your utility companies before you reach the closing table. Most of them require a day or so notice before they can shut them off, so if you stall, you'll be paying for them up to several days after you no longer own the home. Cancelling the water bill even scored me a refund on the deposit I put down when we bought the home two years ago. Score another $18.50.


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