Closing on a House for the Seller

You and your buyer agreed on a closing date and closing agent Closing on a House for the Buyer as part of your purchase and sales contract. That date set the framework for everything that happens from the time escrow is opened until the final paperwork is recorded at the county courthouse, usually four to six weeks later. This period is known as closing.

The good news is that you now have an impartial third party working for you. The closing agent will order the preliminary title report, the payoff balances from your lenders , the property tax balance due either to you or the county, and whatever other paperwork is essential for you to complete this deal.
The closing agent also is gatekeeper for all the buyer has to do as she works toward removing the financing and inspection contingencies. She will see that the buyer’s loan documents arrive in time for the closing meeting. She’ll make sure the inspection contingency is lifted after you and the buyer agree that everything is in order.
When all the terms of your sales contract are met and all the loan documents have been prepared, the settlement agent will prepare the HUD-1 settlement statement, which itemizes the money coming in and being paid out on your closing date. You and the buyer will have a chance to review the statement ahead of the meeting where you sign the final paperwork. The format of that final meeting and who attends depends on local laws and customs. But it should be a day when everyone can celebrate.

Seller responsibilities

Your tasks as seller during the closing period are to:
*Maintain the house in good condition
*Negotiate and perhaps repair something the buyer’s inspector finds
*Notify your utility companies of a final service date
*Prepare to move

Seller’s Tip: Don’t cancel your homeowner’s insurance policy until the transfer of ownership has been recorded.

Buyer responsibilities

The buyer’s duties are more burdensome. They include:
*Hiring a general home inspector and perhaps specialty inspectors
*Negotiating with you to have repairs made, or not
*Completing the loan package
*Buying homeowner’s insurance
*Setting up accounts with utilities

Prior to Closing Day

If your buyer’s lender required a survey of the property, you need to review the document. Question the boundaries if you think something is wrong. Surveys are particularly important in rural areas. Experts advise close scrutiny if your boundary is adjacent to a stream or river that has changed course.

Closing Day

The day your home transaction closes is the day your deed is filed at the county courthouse. A day or two prior, you and the buyer will sign a stack of closing documents. All bills will be paid — agent commissions, mortgage payoffs, down payments. You will receive the proceeds check. The buyer receives the keys.

What to bring

*The deed to your home, if the escrow agent doesn’t already have it
*Photo ID — a driver’s license or passport
*A representative — agent or attorney
*The keys and security codes for the house
Don’t forget to gather warranty and instruction books for heating, cooling, and plumbing systems and for appliances that will stay with the house. Leave them for the buyer when you move out.

What the Seller Pays

What the seller pays at closing depends partly on local law and practice and on the terms negotiated in the sales contract. Just remember that the contract rules. You can’t decide you don’t want to pay something at your closing meeting — unless you can get your buyer to agree. Of course, that means amending the paperwork, which means delaying the closing.

Typical seller expenses

* The outstanding mortgage
* Real estate commissions
* Termite inspection if buyer has an FHA or VA loan
* Property taxes, utility bills, homeowner’s insurance, and condominium dues, if any are due
* Attorney fee, if applicable
* Half of the escrow agent’s fee

If you live in an area where home warranties are popular, this could be another expense. Warranties are a kind of insurance policy that guarantee for a year the mechanical systems and appliances. Because whatever you agreed to pay at closing is deducted from your selling price, you don’t have to bring any money to the closing ceremony. That is, unless your sales price doesn’t cover the total cost of paying off your loan and the offer costs of sale.

Related links: Paying Real Estate Commissions; Escrow for the Seller; The Seller's Closing Documents