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Tag Archives: hud settlement statement software
One of the core changes RESPA made to the home purchase process was the GFE, or Good Faith Estimate, which gives an idea of how much the buyer and seller will have to pay out of pocket. The GFE is only an estimate and the final charges may differ from the HUD-1 settlement statement but only by a certain percentage. The problem lies in the fact that if your estimate is off by a large amount then it’s going to cost you.
What If The Estimates Are Wrong?
RESPA rules separate out the GFE into three categories: 0% tolerance, 10% tolerance and no tolerance. 0% tolerance fees are transfer taxes and similar predictable fees that can’t be higher on the final HUD 1 statement. 10% tolerance fees such as government recording charges can be as much as 10% higher than the estimate. No tolerance charges would include homeowner’s insurance or daily interest charges, and there is no limit as to how much higher these fees can be.
So what if you calculate the transfer taxes wrong and the actual taxes are much higher? The buyer and seller cannot be held responsible for incorrect estimates outside of the tolerances established by RESPA. That means the agent or attorney responsible for making the estimate is going to have to pay the fees, and that could really hurt your business.
Get It Right the First Time
One of the reasons to use HUD settlement statement software like Easy HUD is to simplify the GFE process. You can prepare a preliminary HUD with estimated fees and fill in your GFE estimates. When the HUD is finalized, the GFE worksheet allows you to enter POC charges alongside your GFE estimates. The software automatically pulls the actual fees from the HUD form giving you a RESPA-compliant GFE-HUD comparison.
The form makes it easy to spot any charges that exceed the allowed tolerances. The 10% tolerance charges are totaled since individual charges can exceed 10% as long as the total of charges falls within the tolerance. You can add manual lines for other fees that need to be put into one of these three GFE categories.
Easy Soft’s attorney practice management software is all about helping you get it right the first time. Simple GFE-HUD comparisons are just one of the many ways Easy HUD saves your firm time and money. Contact us to find out more about Easy HUD.
The paperwork associated with real estate closings can be overwhelming if you don’t stay on top of it. You can’t get away with putting off the HUD closing statement since you need that to close the deal, but too many real estate firms procrastinate on 1099-S filling, leaving them in a scramble at the end of the year. Here are a few tips to keep the IRS at bay.
File As You Go – Just because you have until January 31 to file your 1099-S forms doesn’t mean you should wait until the last minute. 1099-S filing should be a part of your closing process. All the information is fresh in your mind so take a moment to fill out one more document, send it off and forget about it.
File Electronically – The IRS encourages electronic filling so why bother sticking with outdated paper forms? Easy HUD, Easy Soft’s HUD settlement statement software, includes an optional 1099-S electronic filing module. You can file with the click of a button. Information is pulled from the HUD form so you don’t have to worry about mistakes on the IRS document. Enrollment in the program is free and your only cost is a very affordable $10 per filing. You get an immediate confirmation number so you know the IRS received your form.
Pay Attention To Addresses – A client selling a house is probably changing addresses. Since a copy of the 1099-S goes to the client, be sure you are using the new address and not sending it to the house that just got sold. This is especially true if you have ignored our first piece of advice and are filing at the end of the year, months after the sale.
Audit Yourself – Even if you file as you go, be sure you haven’t missed any closings. It’s easy to overlook one especially in a large, busy real estate firm but you can be the IRS won’t miss it. Generate a 1099-S Submission Report from the Easy HUD RESPA software as you near the end of the calendar year. This is a record of all your closings and electronic submissions. Look it over to be sure none of your 1099-S filings have fallen through the cracks.
Protect yourself from oversights by automating your practice with Easy Soft’s attorney practice management software products. Download a demo of Easy HUD or any of our titles to take a test drive and see how much faster your real estate closings can be.
Easy HUD is a great help with real estate paperwork and can cut your closing time by 70%, but it does more than just fill out forms. Keeping track of all the disbursements that need to be made can be a nightmare, especially if you are handling multiple properties at the same time, and you need the help of comprehensive title closing software to prepare the ledger.
Many real estate offices still keep their ledgers by hand, and that’s great if you are Bob Cratchit working by candlelight but it’s really not an effective technique in a modern, competitive real estate firm. Manual ledgers are fine if you have a simple transaction but how often are real estate deals simple? You are receiving from and paying to multiple parties. Some items are pre-disbursed or on deposit. You have to split or combine checks, keeping track of every penny on each payment. A simple arithmetic error can take hours to track down.
You can try using generic accounting software but you’ll find these products aren’t going to work as well as dedicated real estate title software. These solutions solve the problem of arithmetic mistakes and complex transactions, but having to enter information into two separate programs increases the chance of entry errors. You can’t connect the ledger directly to the HUD form so you may find it difficult to track each entry on the form to see if it’s been paid or not. Accounting software is a step in the right direction but it’s still a half measure.
Dedicated Real Estate Solutions
Easy HUD, Easy Soft’s HUD settlement statement software, has an optional Ledger module that makes handling the financial side of things simple. It integrates the ledger with the HUD form so you know all the information on the form will be tracked on the ledger. You don’t have to worry about missing a payment or getting confused about what checks go to which recipients. Both the ledger and the HUD form pull information from the same client record, minimizing the chance of data entry problems.
Just as attorneys need specialized legal practice management software rather than generic business products, so do real estate firms need dedicated real estate solutions. Download a demo of Easy HUD and discover all the features that speed up closing, reduce errors and improve your firm’s profitability.
The “death and taxes” line is overdone so we’ll just say that you can’t escape IRS filings no matter what your business is. Real estate practices might file the HUD 1 settlement statement right away but put off the important follow-up document, the 1099-S. Use Easy HUD to make 1099-S filing a breeze.
Do You Need To File?
Although it doesn’t hurt to file a 1099-S, there is no reason to do so if you are exempt. The IRS list reasons a real estate transaction doesn’t have to be reported and real estate professionals should be familiar with these rules. A very short version of the rules is that if the transaction was less than $250,000 (or $500,000 for a married couple) then the sale doesn’t have to be reported. There are a few more provisions so be sure to read the IRS rules before deciding a sale is exempt.
The tax people aren’t going to take your word for it but you can use the RESPA software to complete and print out an 1099-S exemption form for your records.
Filing a Paper Form
Many real estate professionals choose to do their 1099-S forms all together at the end of the year, and then end up dreading the task. They have to dredge up old records and fill out the forms to be mailed all at once. While this is allowed, it’s not the most efficient method. Why not fill out the 1099-S while the information is fresh in your mind? Easy HUD real estate title software pulls relevant information out of the case file so you can easily print and mail off the form as soon as the sale is finalized. You get it out of your way and move on to the next deal.
However paper forms are just so 2003. We live in the internet age, so why not file the forms electronically?
Don’t bother with the inconvenience of printing a 1099-S and then mailing it off, not knowing if it will arrive or not. Use Easy Soft HUD settlement statement software to file the form through our electronic 1099-S service. File with one click and get a confirmation number within seconds so you know your form has been received. The service is simple to use and inexpensive, and once you’ve tried it you’ll wonder how you lived without it.
Streamline your tax filings to speed up closing and reduce paperwork. If you aren’t using Easy Soft attorney practice management software already then try a free demo to explore all the features of our software.
The American Bar Association announced that for the first time in the nearly thirty years they have been tracking malpractice statistics, real estate law passed personal injury to top the number of malpractice claims. The source of the claims was most often real estate documents such as the HUD-1 settlement statement. You may think this finding doesn’t affect you, but no matter how honest and careful you are you still face potential liability.
“Oops” Is Not A Legal Defense
Evil Attorney A is a mustache-twirling villain from a cartoon. He deliberately and fraudulently files real estate paperwork that misrepresents the sale and puts money in his pocket. Sweet Attorney B is a hard-working lawyer who does lots of pro bono work and is nice to his mother. One day he puts a number in the wrong box on the HUD-1, purely by accident. Which lawyer is going to get penalized? Probably both of them.
The difference between maliciously breaking the law and accidentally making a mistake is virtually nothing in the eyes of a judge. While intent may have some bearing on the case, results are what matter. If you prepare or file a HUD 1 statement incorrectly, and your error jeopardizes the sale, costs either party money, or otherwise creates a problem then you may still be subject to penalties.
Software Protects Your Practice
A court’s position is that an experienced and ethical attorney will implement controls to make sure mistakes don’t happen, or at least are far less likely. Having those controls may convince the court to be lenient. HUD settlement statement software ensures that much of the preparation, calculation and filing of the forms are handled in a predictable and accurate manner.
The use of title closing software not only reduces the errors but can provide information vital to a malpractice defense. The automatic audit trail created will be important evidence that the blunder was, in fact, a one-time mistake rather than a deliberate attempt at fraud. It also shows that the practice is making an effort to control the environment and reduce the opportunity to make errors.
Although attorney practice management software doesn’t make your firm malpractice-proof, it can minimize errors and provide evidence of intent. Protect your practice with the latest law practice technology.
In 1975 the desktop computer was still two years off, nobody but university researchers knew what the internet was, and the concept of document imaging was something out of science fiction. This was the year that an article in Business Week Magazine coined an innovative term: the paperless office. It’s taken nearly 40 years for technology to catch up to this idea but the latest generation of HUD settlement statement software like Easy HUD has made it the paperless office not just a reality but a smart business decision. Here are just a few reasons to go paperless.
1) Going Green – This is always the first argument. Save the trees. Don’t dump nasty paper-processing chemicals into the air. Don’t generate greenhouse gases from transporting all that heavy paper. We know that’s important but let’s be honest: once you get past that “rah rah save the planet” stuff, how does it affect your bottom line?
2) Improve Your Image – Don’t just save the planet; tell people you are saving the planet! Let your customers know how committed you are to the environment, implying that those other companies that still use paper must hate all the poor baby seals or spotted owls or whatever the poster animal for the environment is lately.
3) Cut Your Costs – Fill out a HUD 1 statement on the computer and you aren’t paying for paper, ink or toner, printer maintenance, file cabinets and all the other expenses associated with keeping large quantities of paper.
4) Easy Access – If you need a particular document, would you rather spend hours pawing through a dusty file room or seconds calling it up on your computer? Not only is file access faster but it’s more versatile. Use the cloud version of Easy HUD and you’ll have access to all your customer documentation even when you are out of the office.
5) Reliable Backup – How do you protect paper documents from disaster? Fireproof safes and water-tight basements might help until something you didn’t plan for comes along. You can make copies of all your HUD 1 settlement sheets and store them elsewhere, using more paper and running up more expenses. On the other hand if you have electronic documents you can easily back them up offsite, even having the job run automatically every night.
6) Instant Delivery – Today when someone wants a HUD closing statement now, that means now and not tomorrow. Sure you can fax a paper document but how many people still have fax lines? On the other hand, how many people have email? It’s easy and quick to fire off a PDF document from right inside Easy HUD.
It’s not 1975 so stop using 1975 technology. Upgrade to the latest law practice management software to keep your real estate practice on the cutting edge of technology.