Timing the Closing for the Seller

Typically, closing happens four to six weeks after the sales and purchase contract is signed, although it could be sooner or later. Normally, as the seller you are anxious to receive your money and move on. And unless there is a special circumstance surrounding the buyer’s loan, there is no reason to delay.

For the least stressful closing, experts advise choosing a Tuesday, Wednesday, or Thursday in the first three weeks of the month, although it is wise to avoid the 1st or 15th.

Additional Dates and Days to Avoid

Title companies are busiest the last week of the month. Also, Fridays are considered less than ideal because that’s a busy bank day. The 1st, 15th, and last day of the month also are very busy days for financial institutions.

Also try to avoid the end of the year, especially the last day of the year.  You may want to take advantage of deductions on this year’s tax return, but you are likely to run into the disadvantages of offices closing early, being short-staffed, and holiday parties.

If you must close during one of these hectic periods, plan as far ahead as you can.

Other Considerations

Unless you’re dealing with a first-time buyer, it’s likely your buyer has to close another sale before this one happens. And as the seller, you probably are moving to another home and that sale can’t close until this one does. A crisis that reschedules the first closing could easily cause a chain reaction. So leaving a bit of wiggle room between closings is a good idea.

If your buyer balks at closing early in the month, explain that the old saw about paying extra interest may not be as advantageous as it sounds. For example, let’s say the closing happens on October 5. The buyer will pay 26 days of prepaid interest at closing, but her first mortgage payment won’t be due until December 1.

If the deal closes September 30, she will only pay one day’s worth of interest, but her first mortgage payment will be due November 1. So she could look at the early-in-the-month closure as gaining a whole month without a mortgage payment.

But in any event, there’s no free lunch. Interest accrues on the loan from the date of closing; two months later, regardless of the time of month you closed, the buyer has paid the same.

The Paper Trail

What if paperwork isn’t finished by closing day? Regardless of when the closing is scheduled, it can’t happen until the closing agent notifies the parties that all necessary paperwork is in order.
 
There are all sorts of things that can delay closure, ranging from clerical errors to loan documents lost in the mail room.

Money can also trip up the process. If the buyer is told to bring a certified check for $10,000 to closing and shows up with a certified check for $9,000 and a personal check for $1,000, the closing will be delayed.

If in reviewing documents either the seller or buyer find a name misspelled or an incorrect address, or figures that don’t add up, the errors must be fixed before closing proceeds.

This is why both seller and buyer need to stay in touch with the closing agent and do everything they can do personally to facilitate closing on the scheduled day.

The Parties

Depending on where you live, either all parties involved in the settlement will gather around one table or sellers and buyers will have separate signing meetings with the closing agent.

In states where an attorney is the closing agent, it’s likely that the seller, buyer, real estate agents, possibly attorneys representing each party, and perhaps the lender will be present.

At the end of the signing ceremony the seller will receive a check for the proceeds of the sale. The buyer will receive all keys to the house and outbuildings plus the garage door opener and security system codes.

If you live where a title or escrow company agent handles closing and there are two meetings, it’s likely that the seller along with the seller’s agent or attorney will sign paperwork at one meeting and the buyer, accompanied by her agent or attorney, will sign at a separate meeting. This probably will happen on the same day.

The seller’s keys may be left with the closing agent, or an arrangement may be made for the buyer’s agent to deliver them after everything is signed.  

The two-meeting closing is faster for the seller, who has much less paperwork to review and sign than the buyer.

Remember that the new ownership is official the minute the signed and notarized closing documents are recorded at the county courthouse, which usually happens at the end of the day or first thing in the morning. When the deed is recorded, the title of ownership transfers from seller to buyer.

Previous article: The Seller's Closing Documents

Related Links

• The Seller's Closing Documents
• Negotiating Goals for the Seller
• Inspections During Escrow