Congratulations! You've sold your home. Well, almost. The real estate closing process is the final step in selling your property before you can officially hand over the keys and move on. Wondering about what the process looks like? You're in the right place.
The Real Estate Closing Process for Sellers
What should a seller expect throughout the closing process? This step-by-step guide will walk you through everything you need to know about transferring the property to the buyer, fully paying off any mortgages, and receiving your sales proceeds.
But, before you can do any of that, first things first:
Complete the Repairs
We know that sinking more money into a house that you are about to sell doesn't seem like the most logical thing, but if ensuring that your former home has a working furnace, updated plumbing, or foundational repairs were a part of your conditions of sale, then you need to have them completed ASAP.
A good rule of thumb is to commence home repairs immediately after the home inspections wrap up, and you negotiate the terms of payment with your buyer (e.g., a price reduction on the house because of the broken furnace vs. a full price purchase if you fix the furnace).
Sometimes sellers will delay beginning these much-need updates until too close to the agreed-upon closing date, which usually causes significant delays in the process. This is because just like death and taxes, setbacks in construction are something in life we can all be sure of.
Step Out for the Walkthrough
As the official closing date draws near, the buyer and the buyer's agent will typically complete one final walkthrough of the property. This usually occurs on the day before closing, but the exact timeline will vary (all the more reason to complete the needed updates and repairs sooner rather than later).
The purpose of the walkthrough is merely to ensure that you have completed the repairs mentioned above and that no new problems have come up since the initial inspections.
Closing day is when ownership of the property changes hands with the new owner. The seller will pay off any loans he is carrying that are attached to the home and will also need to pay all parties who facilitated documents or services to assist in the sale or closing, like attorneys and Realtors.
For sellers, the actual closing day formalities consist of a lot of sitting patiently while the buyer signs many, many forms. In some cases, the seller might not even need to attend.
This is because sellers might be able to pre-sign the deed and any other transfer documents. They might even be able to give their attorney the power to sign any last-minute “incidental” documents for the buyer.
The money from the sale can then be wired directly to their bank account, or their representation can deliver a check directly to them, depending on their preferences, so there is little need to actually appear at the proceedings.
Typical Closing Costs
There are usually a few costs associated with closing for buyers; however, they do tend to vary based on the particular listing and contracts involved.
The usual costs include, but are not limited to, the following things:
- Credit for Buyer's Closing Costs/Pre-Paid's (as per the Purchase & Sale Agreement)
- HOA Dues, Fees or Pro-Ration (Provided by your HOA management company)
- Home Warranty (as per the Purchase & Sale Agreement)
- Mortgage Payoffs (provided by your mortgage lender)
- Payoffs for other Liens (provided by the lien holder)
- Property Tax Pro-Ration (based on the most current tax bill)
- Realtor Commissions (as per the Listing Agreement)
- Settlement Services Fees
- Title Insurance (this varies by county and is based on the home's purchase price)
After the Closing
After the closing day, you are no longer the owner of the home. At this point, all house keys, mail keys, garage, and gate openers, and the like changes hands with the new owner. Although it is typical to change the locks on a new home after purchase, turning in your keys is an act of good faith as a seller.
You should move out of your property entirely by closing day, and you should leave it in top-notch condition. Most sellers will even hire a cleaning company to ensure that the home is completely ready for its new occupants.
The Final Steps
Once the seller pays the lender the balance of his mortgage loan, the lender should create a “release of mortgage.” Sometimes the lender will send the original copy of this release to the county recorder. Be sure, as a seller, to obtain a copy for tax purposes.
Want to work with an expert during the closing process? With great reviews and a flat rate price, you'll wonder why you didn't go with Clever earlier. Call us today at 1-833-2-CLEVER or fill out our online form to get started.