What to Expect at Closing: A Seller’s Guide

Selling

May 1

Selling your home is a significant milestone, and reaching the closing stage is a huge accomplishment. Understanding the closing process can help you navigate this final step with confidence and ensure everything goes smoothly. This guide will walk you through what to expect at closing, helping you prepare and avoid any last-minute surprises.

1. Understanding the Closing Process

Closing, also known as settlement, is the final step in a real estate transaction where ownership of the property is officially transferred from the seller to the buyer. During closing, all necessary documents are signed, and any remaining payments are made. This process ensures that the transaction is legal and binding.

2. Preparing for Closing

Before closing day, you’ll need to gather several important documents. These typically include:

Identification: A government-issued ID.
Property Deed: The document showing your ownership of the property.
Final Utility Bills: Proof of payment for utilities up to the closing date.
Homeowner’s Insurance Information: Details of your insurance coverage.
Warranties or Receipts for Repairs: Documentation of any recent repairs or improvements.

3. The Role of the Title Company or Attorney

The title company or attorney plays a crucial role in the closing process. They ensure the transaction is legally sound by:

Conducting a title search to confirm you have the right to sell the property.
Preparing and reviewing all necessary documents.
Facilitating the transfer of funds and property ownership.

4. Final Walkthrough

The buyer typically performs a final walkthrough of the property shortly before closing. This is to ensure that the property’s condition hasn’t changed and that any agreed-upon repairs have been made. As a seller, make sure the property is clean and any promised repairs are completed to avoid delays.

5. Reviewing the Closing Disclosure

The Closing Disclosure is a critical document that outlines the terms of the sale, including the sale price, loan payoff amounts, prorated property taxes, and closing costs. Review this document carefully to ensure all details are accurate. Key points to check include:

Sale Price: Verify the final sale price of your home.
Loan Payoff Amounts: Ensure your mortgage payoff amount is correct.
Prorated Property Taxes: Confirm the prorated taxes are accurately calculated.
Closing Costs and Fees: Review all listed closing costs and fees.

6. Signing the Documents

At closing, you’ll need to sign several documents, including:

Settlement Statement: Itemizes the financial details of the transaction.
Bill of Sale: Transfers ownership of personal property (if applicable).
Transfer Tax Declarations: Documents for any applicable transfer taxes.
Affidavit of Title: Confirms you have the right to sell the property.
Closing Disclosure: Final confirmation of the transaction details.

7. Paying Off the Mortgage

Your remaining mortgage balance will be paid off at closing. Obtain a payoff statement from your lender to confirm the exact amount needed to pay off your loan. This ensures there are no discrepancies on closing day.

8. Transfer of Ownership

Once all documents are signed and funds are transferred, the property ownership is officially transferred to the buyer. At this point, you’ll hand over the keys, garage door openers, and any other necessary items.

9. Receiving the Proceeds

You’ll receive the proceeds from the sale after all closing costs and mortgage payoffs are deducted. The funds can be disbursed via wire transfer or check, depending on your preference.

10. Post-Closing Responsibilities

After closing, you’ll have a few post-closing tasks to complete:

Cancel Utilities and Insurance: Notify utility companies and your homeowner’s insurance provider of the sale.
Update Address Information: Forward your mail and update your address with any necessary entities, such as the postal service, banks, and subscriptions.

Reaching the closing stage is an exciting milestone in selling your home. By understanding the closing process and preparing accordingly, you can ensure a smooth and successful transaction. Remember to ask questions and stay informed throughout the process.

FAQ

1. What happens if there are issues during the final walkthrough?

If issues arise during the final walkthrough, such as unfinished repairs or damage, these need to be addressed before closing. This may involve negotiating with the buyer to either fix the issues or provide a credit to cover the cost of repairs.

2. How long does the closing process take?

The actual closing appointment usually takes about one to two hours. However, the entire closing process, from offer acceptance to final signing, can take several weeks.

3. Can I attend the closing remotely?

Yes, remote closings are becoming more common, especially with advancements in digital signatures and video conferencing. Check with your real estate agent and closing attorney to see if this option is available.

4. What is a payoff statement, and why do I need one?

A payoff statement is a document from your lender that shows the exact amount needed to pay off your mortgage. It’s crucial to have this to ensure your loan is fully paid off at closing without any discrepancies.

5. What should I bring to the closing appointment?

Bring a government-issued ID, any required documents like the property deed, and any receipts or warranties for recent repairs. Your real estate agent or attorney will provide a complete list of needed items.

6. What if the closing disclosure has errors?

If you notice any errors on the closing disclosure, immediately inform your real estate agent, attorney, and the title company. These errors must be corrected before you can proceed with the closing.

7. When will I receive the proceeds from the sale?

You’ll typically receive the proceeds from the sale on the day of closing, after all documents are signed and funds are transferred. The funds can be provided via wire transfer or check, depending on your preference.

8. Are there any fees I need to pay at closing?

Yes, there are closing costs that you, as the seller, are responsible for. These may include title insurance, transfer taxes, and real estate agent commissions. The closing disclosure will itemize all these costs.

9. What if I can't attend the closing in person?

If you can’t attend in person, you can arrange for a power of attorney to sign on your behalf, or you may be able to do a remote closing. Discuss these options with your attorney and real estate agent.

10. Do I need to leave anything behind for the buyer?

Leave behind any keys, garage door openers, and instruction manuals for appliances. It’s also courteous to provide contact information in case the buyer has any questions about the property.