Selling Your Home Series: Closing the Deal!

I like to be honest with people in all things, so I will tell you that until recently, as a new Realtor, I had no idea that actually buying or selling a house was the EASY part. When I last bought a home, it was when I was in my early 20’s, they were giving mortgages away to anyone, and I honestly don’t remember a whole lot of what went on. I also bought new construction, so things were easy. As least, it was easy as far as I knew back then. I also did the whole thing without a realtor. Imagine!

Now, I like to prepare my clients as soon as I can about what to expect. If you meet with me early in the process I can give you information, I can help you plan, and prepare you for all of this. If you buy a house with me, I even made up a checklist for my buyers to use to organize everything from contract to closing. There is a lot that goes on both with you the buyer or the seller and behind the scenes, and I will put it all out there for you to see.

I found this article to be pretty good as far as the things that go on between contract and closing. It might be different based on your area and circumstances, but your realtor can walk you through it. In my area, the closing is mostly dependent upon your type of loan. A conventional loan can usually close in about 30 days. FHA loans take 45-60. 203Ks (a Renovation Loan) can take up to 120 days. Short sales are not short! Again, your loan officer and your realtor will help you. If your realtor is a former teacher, you might even get a worksheet explaining the whole thing.

I hope this helps you be prepared for the day when you are closing!

Jennifer

It might seem as though once a sale agreement has been signed that the selling process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin. A sale agreement sets not only a purchase price for the home, but also a series of terms and conditions.

For instance:

• Contracts routinely depend on the ability of a buyer to obtain financing, which is why most sellers prefer buyers with preapproval letters from lenders.

• A growing percentage of transactions involve a home inspection, or a physical review of the home by a trained and independent observer.

• Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, termite inspections, surveys and an appraisal to assure that the home has sufficient value to secure the loan. The REALTOR® typically arranges required inspections and helps the owner prepare for closing.

When should you close?

It takes time to arrange financing, conduct inspections, obtain appraisals, locate replacement housing, contact movers, pack and actually move. While instant closings are not practical, neither are closings too far in the future. The problem with closings much past 60 days is that loan rates are difficult to lock in. If mortgage rates go up, it's possible that the buyer will no longer be able to afford the home and thus the deal may fall through. The result of these considerations is that most homes close 30 to 45 days after a sale agreement has been signed.

What happens?

Closing -- or "settlement" or "escrow" as it is known in some areas -- is essentially a meeting where the closing agent (the party who conducts settlement) takes in money from the buyers, pays out money to the owner and makes sure that the purchaser's title is properly recorded in local records along with any mortgage liens.

The closing agent reviews the sale agreement to determine what payments and credits the owner should receive and what amounts are due from the buyer. The closing agent also assures that certain transaction costs are paid (taxes and title searches).

Closing is also the time when "adjustments" will be made. For instance, suppose you've pre-paid taxes four months in advance. In this case, the closing agent will compensate you for the prepayment at closing by having the buyer pay you additional money.

It could also work in reverse. If you are behind on property taxes, the closing agent will reduce the money due to you at settlement by the amount of the unpaid taxes.

How do you prepare to sell?

It's important to look at the sale agreement and review your obligations. For instance, if you have agreed to paint a room or replace the dishwasher, such work must be completed before closing. Your REALTOR® can discuss your agreement and the steps which must be taken to complete the transaction. The closing agent will handle both the settlement papers and related documents.

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[source:  http://www.realtor.com/home-finance/sellers-basics/closing.aspx?source=web]