What Happens During the Closing on a House?
A real estate closing is when the home officially transfers from the seller to the new buyer. It’s also the event where all the money is settled up – including what the real estate agent earns on commission from the sale if you hired one to sell your house.
This process is usually a fairly smooth one if you’ve made sure that everything you need for that day is in order. While a real estate agent does make sure that you have all the documents that are needed, you can do the same thing if you’re selling your home yourself.
When you schedule a closing, always allow for extra time than you think it might take. Sometimes these things do run over. Most people think it takes an hour or two, but it can take three to four hours in some cases.
It’s tempting to schedule the closing on the very last day of the month because then the buyer saves money on interest. But if you do that and you don’t have everything you need or the buyer doesn’t, you can end up going into the beginning of the next month and that changes the amount of interest on the deal.
If you’re selling your home yourself, you’ll want to let the buyer go through the house the day before the closing to make sure that everything agreed upon was accomplished.
You don’t want the buyer moving in, discovering something he didn’t like or feels wasn’t taken care of as agreed and then he gets upset and starts legal action. For the closing, you’ll need to bring all the important paperwork.
You’ll need the contract the buyer signed, and the appraisal report. You’ll need proof of a clear title, which doesn’t mean that the home is paid off – it means proof that you don’t owe back taxes.
Present at the meeting should be yourself and any real estate agents if either of you hired one and the attorney handling the closing. It’s in your best interest not to try to handle a closing by yourself unless you are a lawyer.
You can accidentally leave something out that can come back to haunt you in the future. You want to protect yourself from this. The attorney should be someone who specializes in real estate law.
If you choose not to use an attorney, then you should have a settlement agent. This agent checks over the documents to make sure that everything is signed and all the information is correct.
If you’re doing everything yourself, then you have to have something showing the sale price of the home and everything that’s involved in that. A “for sale by owner” deal usually means that you’ll have to pay or split escrow charges and the transaction fee if there is one and it’s charged separately from other fees.
After you and the buyer sign all the paperwork, you’ll receive a check minus all the agreed up on costs you’re paying – if any. You’ll pass the new owner any keys for the house and then the lawyer or title agent will file the deed with the deeds office.
