While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.

The IRS clarification says: “In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Source: Washington Post (02/20/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Here are some things that buyers should know as they go through the application process:

* Ask for the “Good Faith Estimate” early. It won’t be released until it is officially “complete” and all the questions are answered. Push applicants to find answers right away to all the lender’s questions.

* Suggest they read and ask questions about the fine print. Identifying and negotiating all the fees and charges can cut an applicant’s costs.

* Shop title insurance. Point buyers toward Web sites like Closing.com, where they can comparison shop.

* Get a commitment. Insist that the lender or loan broker agree that there won’t be any other charges on the HUD-1, which most borrowers don’t see until they are at the settlement table. “If [the lender] won’t agree to that, you have to be a little suspicious,” says Claire Fennessey, senior vice president of Entitle Direct.

* Question flood insurance. If a property requires flood insurance, point buyers (and sellers) toward a civil engineering firm with experience with the Federal Emergency Management Agency’s resources to ensure that they aren’t paying too much. Eligibility for a preferred risk policy can cut costs substantially.

Source: Chicago Tribune, Mary Ellen Podmolik (07/05/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222