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Closing on a House for the Seller

You and your buyer agreed on a closing date 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. Escrow 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.
Escrow also is gatekeeper for all the buyer has to do. They will see that the buyer's loan documents arrive on time for the closing. Mean while, your realtor is working to remove the financing and inspection contingencies 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, Escrow 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 documents come from Escrow - and in California - you do not need to attend a Closing meeting.  Your agent will contact you to congratulate you on the transfer and Close of your escrow.  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. Also, a final walk through may be requested. This gives the buyer one last chance to view the property and make sure that agreed upon repairs are completed.


Closing Day

The day your home transaction closes is the day your deed is sent to be filed at the county courthouse. You and the buyer will sign a stack of closing documents. All bills will be paid such as agent commissions, mortgage payoffs, down payments, etc. You will receive a proceeds check if one is due to you. The buyer receives the keys, remotes for the garage doors, and possibly reciepts from any work agreed to be done .

What to get to Escrow

  • The deed to your home, if the home is paid off and has no mortgage or leins
  • Photo ID ? a driver's license or passport
  • A certified check if required in the amount told to you by Escrow 
  • 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 that was already agreed to by both parties and written in your contract - unless you can get your buyer to agree. Of course, that means amending the paperwork, which could mean delaying the closing.

Typical seller expenses

  • The outstanding mortgage
  • Real estate commissions
  • Property taxes, utility bills, homeowner's insurance, and condominium dues, if any are due (most of this is prorated at closing)
  • Escrow, Title and/or Attorney fees

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 or proceeds. That is, unless your sales price doesn't cover the total cost of paying off your loan and the other costs of sale.

By Diane Tuman

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