Franklin TN Real Estate Closings and the HUD-1 Explained


When you are buying or selling real estate in Franklin Tennessee you will want to have a Title company perform the closing and handle the escrow funds (Money of other people, held in their trust).  The Grumbles Team prefers to use DLO Title in Franklin for our clients as they are knowledgeable, friendly and they reward their repeat customers with half price closings for life. The title company will prepare for you a HUD-1, which is just the name of the government approved form that will act as the balance sheet for the financial transactions that occur on the day of the sale (a.k.a. closing day, named so because the escrow account will be closed that day).  The Hud-1 shows the monies coming into the escrow account from sources like the buyer in the form of the check for down payment and also the loan money from the lender.  The Hud-1 will also show monies going out to pay vendors and to the seller if they have equity in the home above the mortgage payoff.

Two items or more will have some sort of proration performed, so you may hear that the “Taxes were Prorated”.  Well all that means is that the math was done to split up the entire cost between the two parties appropriately.  Take for example the property taxes.  In Tennessee the taxes are paid after the year is over, and lets say we are set to have the closing on April 15th.  The taxes are net yet paid for the current year so on the HUD-1 the seller will be charged for 3 months and 15 days of the current year tax bill.  The buyer receives that as a credit and then on December 31st they will have that money to apply towards the full year tax bill that is now their responsibility.   The reverse would typically hold true for HOA dues.  Those are usually paid in advance so when the sale took place on April 15th, the HOA would be paid through the end of April.  Therefore, the buyer would have a charge for the days from the 16th til 31st of the month.  The seller receives this credit on their side of the HUD-1 balance sheet.

We hope that this helps to explain the HUD-1 and the real estate closing to those of you who are first time buyers of real estate and even to those of you who do not buy or sell all that often but are doing research on the subject. We can be reached for questions at 615-587-5843 or feel free to comment on the blog and we will respond.  Look for future educational real estate video blogs as there is more to this transaction and the HUD-1.


Franklin TN Real Estate with Mike Grumbles & The Grumbles Team specializing in Franklin TN Community Homes for Sale

The Grumbles Team is our family serving your family with your real estate needs in Franklin, Tennessee 615-587-5843.

Your Williamson County REALTOR!

EXIT Realty of the South | 1227 Lakeview Dr. Suite 1 | Franklin | TN | 37067 | 615.550.5555

 Williamson County Real Estate Agent

Each EXIT Office Independently Owned and Operated


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