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Balancing the Closing

... Incoming and outgoing funds

Power Closer balances many closings automatically, and can even produce exactly the check allocations you need, simply by entering data onto the HUD form. However, in some cases you will need to take some extra steps to balance a closing or to produce the exact checks you need.

You can think of this as a three-step process:

  1. Verify the total incoming funds.

  2. Verify that the incoming funds equals the total checks.

  3. Verify that the checks are allocated correctly.

Print and review the Balance Sheet

The Balance Sheet shows settlement funds received for deposit and how those funds are being disbursed. It shows the payee, amount and description for each check. And when you need to combine several items into a single check, the Balance Sheet describes the individual amounts that make up the check.

Always review the Balance Sheet before you produce the checks. This is true whether you use Power Closer's bookkeeping interface to generate checks automatically, or use the Balance Sheet to prepare checks manually. The amounts on the Balance Sheet should be accurate, and the funds should be in balance.

Verify the Incoming Funds

Verify that the Balance Sheet shows the amount of Incoming Funds that you expect to deposit in the bank. The Incoming Funds from the Lender should equal the total amount of lender's drafts and checks that you expect to deposit for this closing. To correct this amount, press the button for line 202, Principal Amount of New Loan(s), and enter this amount in the box labeled "Lender's funds into trust".

To arrive at the correct amount of Incoming Funds, you might also need to check or uncheck the check boxes at lines 204 and 205 or adjust line 201 (Deposit or earnest money).

Combine any outstanding credit items into checks

If you enter a negative amount on page 2 of the HUD, or use the check boxes at lines 204/205, then the negative amount must be used to reduce the amount of a check. If you don't combine one of these negative amounts with a check, then the negative amount shows on the right-hand side of the Disbursements section of the Balance Sheet.

Review the Balance Sheet to see whether there are any negative items on the right hand side that need to be combined with a check.

Point and click to Combine and Uncombine Checks

It may be necessary to combine or split disbursement items to produce the checks that you need.

To combine items, open the closing file if necessary, and go into the Disbursements window by pressing Ctrl-D, or by clicking the Window menu item, then clicking the Disbursements menu item. Then press Alt-C or click the Combine menu to start a combine operation. Then click on each item to be combined from the Disbursements list. Finally, press Alt-C or click the Combine menu again to combine the selected items.

To uncombine, click on the desired item from either the Disbursements list or Supporting Data list, then press Alt-U or click on the Uncombine menu item.

You can also double-click on a check in the Disbursements list to edit the check's memo line, payee name or address, without changing the Settlement Statement.

Refunds of overpayments by the parties

When you know a party will bring a cashier's or certified check for more than is needed, you can create a refund check in the Funds In window.

Type Alt-W or select the Window menu item, then type F or select Funds In. Enter the total amount of the expected check in the box for Buyer/Borrower or in the box for Seller, and place a check in the Specify Deposit check box.

You can preview and edit the refund check in the Disbursements window, and it will be included on the Balance Sheet and with checks you export to accounting software.

After you import Power Closer data to Accounting

After you import accounting data from Power Closer, your deposits and checks should match the items shown on your Balance Sheet. If you need to make changes to the money after importing, there are two ways to proceed.

First, you can make changes directly in your accounting system. NOTE: When you are in Quicken or QuickBooks and you manually create new transactions for a real estate closing, then you must enter the closing’s filename into the Quicken "Category" or QuickBooks "Class" for each item. Second, you can delete all the Quicken/QuickBooks items for a closing and then import your corrected data from Power Closer.

You can print and review a Transaction Detail Report for the closing, filtered and totaled by Quicken Category or QuickBooks Class, before you print the checks.
  

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