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Real Estate Closing
When real estate agents receive funds to be distributed to other parties, they put these funds into a trust account. Unfortunately what often happens is the agents don’t appreciate the difficulty of managing funds from multiple clients comingled in the same account and get themselves into trouble. Without a good trust accounting system they can end up in serious trouble.
This isn’t to say agents are careless or unethical. However even highly qualified professionals can get so focused on the complexities of completing the HUD 1 settlement statement correctly that fund management is more of an afterthought. They know the numbers balance in the HUD form so they tend to assume it will work out when monies are received and paid out.
The biggest problem occurs when agents accidentally use one client’s funds to pay another client’s charges. While this might seem an innocent oversight as long as it all balances in the end, this is actually a serious error that could lead to loss of a real estate license and even criminal penalties. The “oops I didn’t know” defense typically doesn’t go over well.
Nowadays agents have access to simple and affordable HUD settlement statement software so it’s rare that agents fill out real estate papers by hand. However when shopping for real estate software it’s important to find a product that includes trust functions or interfaces with real estate accounting software that includes trust fund management capabilities. This is why we have made it easy to transfer closing ledgers from Easy HUD to Easy Trust so you can automate your trust handling functions.
You may ask if you really need a robust legal practice management software package rather than a commercial accounting program, and we would say that you do. Standard business accounting packages don’t include features such as the ability to easily track each client’s funds in one account, three-way reconciliation reports or built-in conflict checking.
Don’t trust the future of your real estate business to error-prone manual accounting or under-featured business accounting packages. Try Easy Trust risk-free for 30 days and see how simple we make trust accounting.
Time is what we want most, but what, alas! we use worst — William Penn, 1693
Time is money — Benjamin Franklin, 1748
Four centuries later, those statements are as true as they were in their day. We feel like we don’t have enough time but that is because we squander it by working inefficiently, and when we waste time we waste money. Today we have time-saving tools that Penn and Franklin couldn’t have even imagined, but the tools work only if we use them efficiently.
Our clients report that Easy HUD allows them to complete the HUD 1 settlement statement in 70% less time than it takes to do it by hand. Easy form completion and centralized case data allow the forms to be completed more quickly. Automatic calculations are not only faster than punching numbers into a calculator, but eliminate arithmetic errors that can take hours to track down.
Easy Soft’s HUD program is more than an easy way to complete a HUD 1 statement. It includes other time management tools that streamline every aspect of your real estate practice.
There is one piece of advice common to every time management book and class you can find: Write It Down! Trying to keep your schedule in your head creates a disorganized muddle and has you jumping from task to task. Making lists focuses your efforts and ensures you’ll never forget important details.
This is why we incorporate a task list and a to-do list so you can easily track tasks whether you are a single-person office or if you delegate to a team of professionals. The calendar shows you appointments, filing dates and other important information at a glance. Track the electronic documents associated with a particular HUD closing statement using the LinkedDocs tab, which not only lists the documents but links to their location on your computer or office network.
When you optimize your real estate office, you can do more with less. You spend less time on each case allowing you to handle more cases. You reduce errors. You provide better service to your clients.
Contact Easy Soft to discover how our real estate and law practice management software products simplify and automate the details of your practice.
Nobody likes extra paperwork so many of us look for ways to avoid filling out documents. The HUD-1 settlement statement must be used for almost all property purchases that involve a mortgage. There are cases where you can skip the paperwork–but should you?
For example, the HUD-1A is an optional form used in refinance transactions. Agents can use the full HUD-1 form in single-party transactions, such as refinancing or equity lines of credit. HUD even recommends using the HUD 1 settlement sheet even when not required by RESPA regulations. Some agents hesitate because they are afraid that by using the forms they are opening themselves to liability or unnecessary regulation.
Actually agents are safe using the HUD form when not required. The New RESPA Rule FAQ (PDF file) available on HUD’s website says on page 44 that “using the HUD-1 form does not subject a transaction to coverage under RESPA”. So even if you use the HUD-1 on a non-RESPA transaction, you won’t suddenly be exposing yourself to RESPA rules.
The obvious next question is, “Why would I want to fill out a government form if I don’t have to?” The answer is that filling out the HUD 1 using HUD settlement statement software like Easy HUD is actually easier than figuring out a refinance, credit line or other transaction by hand. It’s quick and simple to fill out the forms when the software does the math for you. The form pulls information from the client record so you minimize the chance of data entry statements. You have a standard form where you can easily find the information you need, especially if you routinely work with HUD-1 forms.
Even if you complete the HUD-1 form purely for internal use, the features of a comprehensive legal management software package reduce the time you spend completing a transaction and getting the information you need. You can handle more clients and that has a positive effect on your firm’s bottom line.
Skeptical? Find out for yourself. Try Easy Soft’s title closing software risk-free for 30 days. You’ll see that HUD form automation improve the quality of real estate financial services you can offer your clients.
The 2010 RESPA Final Rule was designed to simplify HUD form processing as well as to ensure timely disclosure of full settlement costs. Simple is a relative term and real estate professionals should not be trying to complete the “simpler” HUD 1 settlement sheet by hand. Today’s real estate regulations are too strict to trust to fallible humans.
Inexpensive RESPA software protects real estate professionals and their clients by facilitating RESPA compliance. Agents can use the GFE-HUD comparison sheet to ensure the figures on each form make sense. Figures from the GFE and HUD are automatically copied over onto the comparison sheet so agents know the numbers in the summary are the same as the numbers on the actual forms.
There was mixed reaction to the 2010 RESPA Final Rule’s provisions on fee itemization. Although the rule was designed to prevent consumers from being buried under a laundry list of petty fees by presenting them with a lump sum total, many organizations–including the federal government that made the new rule!–want the fees broken out. Agents using real estate title software can present the lump sums to their clients while still retaining the itemized lists of charges to show to other interested parties.
Finally, monitoring all the setoff charges on a HUD-1 settlement statement can be a nightmare. Our software includes a setoff tracker that makes it easy to list each charge, attribute it to the buyer or seller as appropriate, and credit or debit the correct total on the first page of the statement.
HUD documents are too complicated to do by hand. Software helps you stay in compliance with RESPA laws, ensures your calculations are correct, minimizes the chance of data entry error by not forcing you to enter the same information multiple times, and greatly accelerates the time it takes to process a closing.
Take advantage of the technology at your fingertips. Contact us to find out more about how Easy HUD and our other law practice management software products simplify your life, speed up your work day, and protect your practice and your clients from unfortunate mistakes.
Mortgage rates are plummeting. Just this week Freddie Mac reported the 15-year fixed rate hit a record low of 2.61% and the 30-year fixed rate is at 3.4%, less than 0.1% above its record low. Homeowners are rushing to refinance to take advantage of these low rates and real estate offices not using real estate title software are at a disadvantage over those who do.
When there is a rush of customers, you can’t afford to take as much time filling out the HUD closing statement as you used to. The faster you complete the forms, the more clients you can take in a typical workday. You don’t want to have to tell a potential client–or worse, an existing client–that you are too busy to get to them right now. Nor do you want to leave customers waiting long enough for you to fill out the forms that they start shopping around for another agent.
HUD settlement statement software like Easy HUD cuts your closing time by up to 70%. You can process the paperwork in a flash and move on to the next client. If the refinance is an existing customer, then all you have to do is pull in the information from the previous sale, verify it is up to date and click to print the refinance form. New clients are nearly as fast–you just enter a little information and let the software do the hard work.
We realize that when it comes to the HUD 1 settlement statement, accuracy is more important than speed and that’s another advantage of using software rather than filling the papers out by hand. Calculations are performed instantly and are correct. You can be sure you are completing your closing in full RESPA compliance.
Electronic 1099-S filing puts the crowning touch on fast, accurate closing. File the forms as you close rather than doing a year’s worth of forms in a rush. All data is verified before being securely transmitted to the IRS and you get immediate confirmation the form was received.
Use our legal software for attorneys and real estate agents to bring your practice into a new era of speed, efficiency and customer satisfaction.
We often talk about how Easy HUD makes it easy for real estate agents to speed up closing times by up to 70%, as well as ensuring calculations are performed correctly. However Easy HUD isn’t just for agents. It’s the ideal real estate closing software for attorneys as well.
Real estate attorneys are often included in real estate transactions to generate documents such as rental agreements or purchase contracts. Agents can fill out boilerplate versions of these contracts but if the base document requires modification, then a lawyer must make the changes to ensure the new document is still legal and binding. Add the Real Estate Docs Module to our title closing software to get access to over 200 customizable real estate documents including agreements and contract clauses. Attorneys can easily add to these, creating their own contracts for easy distribution to the agents they work with.
Attorneys are often involved in the purchase negotiations. Buying property is not as simple as writing a check. A host of fees and taxes turn a simple transaction into an accounting nightmare, and yet to effectively negotiate a deal the attorney needs to be able to calculate how a given deal will affect the bottom line. With HUD settlement statement software attorneys can generate a comprehensive new offer within seconds, and if they use the cloud version they can access the software from anywhere they have an internet connection.
Attorneys provide due diligence by reviewing a final deal to be sure it is fair and legal. The HUD 1 statement is complex and even experienced real estate agents can make errors. Software simplifies the process and allows attorneys to make changes effortlessly. If the agent is also using Easy HUD then the attorney can simply load the agent’s data file for immediate review.
Easy HUD works well with our other products. For example attorneys can export the ledger from the real estate software and import it into Easy Trust to oversee all escrow account transactions. Add Easy HUD to your suite of legal practice management software to automate and simplify your real estate practice.