Closing Time!
You are finally done with the home inspection and negotiations and it is finally time to close – the final step. To help you understand this process more fully, FlatFee.com has created a summary of what happens during and after closing.
The Closing Procedure of Houses for Sale
The closing meeting is where the ownership of the home is officially transferred from you as the seller to your buyer. The buyer typically chooses the closing agent who then coordinates all of the document signing, as well as the collection and disbursement of funds. Be prepared, as there is plenty of signing to do!
The closing of your home and MLS listing is a formal meeting that is attended by the buyers and sellers (and their real estate attorneys if they have them), a representative of the lender, and of course the closing agent. The meeting is usually relatively brief, taking about one hour, and is usually held at the closing agent's office.
Firstly, the closing agent reviews what is known as the "settlement sheet" with you as well as the buyer, and then answers any questions. This settlement sheet itemizes the services provided and lists the charges to the buyer and the seller for the closing of your home and property.
Secondly, the closing agent asks the buyer to sign other loan documents, such as the mortgage note and the Truth-in-Lending statement. A Truth-in-Lending Statement outlines the costs and terms and conditions of the new loan the buyer has negotiated with the bank. The mortgage note represents the buyer's promise to pay the lender according to the terms of the loan.
Then, if everyone agrees that the paperwork on your home and Flat Fee MLS listing is in order, the buyer and seller submit a certified or cashier's check to cover the closing costs and the balance of funds due for the proper closing. After that, the check from the lender covering the mortgage amount is submitted to the closing agent.
Next, if the lender is paying the buyer's annual property taxes and homeowner's insurance, a new escrow account will be created at this point.
After the meeting, the closing agent officially records the mortgage and deed at the local government clerk's office or registry of deeds. This is the legal transfer of the property in your closing and may take a few days or weeks after closing to finalize. The closing agent has disbursed the funds to everyone that is owed money from the sale at this point. It is after this transaction is finally recorded with the county that the buyer becomes the new official owner of the home!
Closing Costs
Usually, closing costs are a part of all the loans and are normally the buyer's responsibility to pay. However, in the case of VA and FHA loans, some closing costs may end up being paid by you, the seller. If the buyer has a VA loan, the seller may pay closing costs as well as prepaid expenses. The sales contracts that you have signed or are signing should be very explicit in stating what charges each party will pay. As required by the Real Estate Settlement Procedures Act (RESPA), the buyer and seller will be given an opportunity to see the "settlement statement" for the sale of your home at least once prior to the closing meeting. This statement will show all costs for both buyer and seller. Typical closing costs include but are not limited to:
- Appraisal fee
- Inspection fee
- Title insurance
- Tax service fee
- Recording fees
- Pest inspection
- Attorney's fees
- Underwriting fee
- Pest Inspection fee
- Credit report survey
- Property tax escrow
Congratulations! Now that all of that paperwork has been signed, sealed and delivered, you have sold your home and do not have to worry or stress any longer. If you need to buy a house to move into next, you can focus on buying the home of your dreams, whether it’s in the Alabama or Florida real estate market.
In summary: After you and the buyer have agreed to the sale, the final step is the closing. At this meeting, there will be various parties present to handle the signing of paperwork and turning it in to the local government so the transaction is officially recorded and complete.
