What To Expect When You’re Closing
This is part 6 of a series of 6 articles that guide homeowners through the home selling process. These articles provide insight and suggestions to help homeowners sell their homes.
Step 1: You’re Ready To Sell Your Home
Step 2: How To Price Your Home To Sell
Step 3: The Property Disclosure Statement Explained
Step 4: What To Do With Your First Offer
Step 5: How And When To Accept An Offer
When you and the buyer sign the purchase agreement, agreeing on price and terms of sale, the closing process begins. Depending on the transaction, the entire process could take from 2 weeks to 60 days. This timeline excludes short sales, which usually take longer. If your buyer is an all cash buyer then all that remains to be done is for your selected title company to determine that your home is free of other claims to its title, called liens. The next step is the exchange of money and property deeds, keys and garage openers. However, most buyers use loans to buy a home and that is most likely what you are facing.
Loans take about 30-60 days to be approved, depending on which mortgage your buyer is qualified for. Many first-time home buyers use FHA loans, these loans expect more from you, as the home seller, and from your home. Inspections, appraisals, and repairs all factor into what the loan officers take into consideration before approving a buyer’s loan request. Regardless of the loan type, there are important steps every real estate transaction requires before reaching closing day. First, you and the buyer must open an escrow account.
Escrow is a neutral third party that holds all the necessary parts for closing until the requirements outlined by the purchase agreement are met. Once the account is open, and your transaction’s escrow officer has the purchase agreement, the buyer will deposit their good faith deposit, also called earnest money.
Inspections and Appraisal
Home inspection, pest inspection, title inspection, and appraisal come next. Title search is a very important part of the closing process. This will unearth any present claims to your home and protect the buyer from losing their home in the future to the living kin of a past owner who has passed away. Sometimes the buyer pays the costs for these inspections and sometimes you do, it all depends on what was agreed upon in the purchase agreement.
If the contract you signed was contingent on the satisfactory results of these steps, the buyer may want to walk away from the sale. Offer, instead, to renegotiate. A few things you and the buyer may be renegotiating are: total price, what is included in the cost of the home, who pays for the inspections and repairs, and what must be repaired before closing day.
Once that hurdle has been overcome, closing day is in sight. It’s time to call your homeowner’s insurance and alert them of either a transfer or cancellation of your insurance on the day of closing and to transfer the utilities to the name of the buyer. Make sure each company knows not to enact any changes before the date of closing.
The day before closing, the buyer will want one final walk through to make sure that requested and required repairs have been made and that you have left the home in the promised condition. Once everything is satisfactory and the buyer’s loan has been approved, it’s time to for closing day.
During closing you will receive important documents about the transfer of title and what you are liable for as the seller. Make sure you read everything. If you have any questions, ask your First Team real estate agent or the closing attorney. These documents could play a big role in your future finances so it is important to know what you are agreeing to. You have 24 hours to fully review these documents.
On closing day, you will have understood and signed the documents, the buyer’s loan will have been approved and escrow will be ready to close. Because all the terms of the purchase agreement have been met, your escrow officer will give you the money you earned from the sale of your house and transfer the keys and deed to the buyer. After a long month or two of negotiations, you’ve finally sold your home.
Just getting started? Check out previous steps for help at each step of selling a home: