If you have ever purchased a home of your own, closing on your flip will be substantially the same. The seller will sign the deed and will also sign other documents indicating there are no known title problems, there are no unpaid bills for home repairs, and he or she is not a foreign seller subject to IRS withholding on the purchase money. Both of you will sign documents indicating your understanding that the closing attorney is not your attorney and is not obligated to look out for your best interests or give you advice. You will both sign the settlement statement, showing that you agree with the calculations and the distribution of the money. You will sign a promissory note for any financing and a mortgage or a deed of trust, depending on your state.
You will be given a closing packet with copies of all your documents. The lender will receive the original promissory note. The closing company will send the original deed and mortgage to the proper authorities for recording in the real estate records, or it will take the appropriate actions for counties that use the Torrens system of real estate registration.
You should make one copy of the closing statement and put it in the accounting file for that flip. Some closing expenses are deductible in the year of purchase. Others must be deducted in a pro rata manner over the lifetime of your loan, with any balances deducted in full if the loan is paid off early. Still, other expenses are added to your basis, purchase price, and have the effect of reducing your taxable profit. These rules are different from the ones for deducting expenses associated with buying a primary residence, or even a secondary residence. For the most part, closing expenses for a flip are added to basis, and may not be deducted as business expenses.