Selling a home for the first time is a hectic experience. Even in a hot housing market, you can’t expect to just put your home on the market, get an offer, and be done with it. Selling your home isn’t that simple, but it doesn’t have to be complicated either.
Whether you’re working with a good real estate agent or you sold without an agent, when you find a buyer, that’s when you start to get into the real work. For sellers, the home closing process is a time-consuming and often stressful affair, even if you’re handling it all remotely.
Does the seller have to be present at closing? What happens during this process? In this piece, we’ll discuss how the closing process works, what you need to do as a seller, and how to handle the process whether you’re present in-person or not so you can get through the process stress-free and get your hands on that check.
After you’ve accepted a buyer’s offer, closing is the phase of the home selling process when money and ownership documents are transferred from seller to buyer. You may have heard the term “closing date,” which refers to the date that official closing occurs.
The closing process isn’t just one day, however. That process consists of all of the steps outlined in the sale contract that must happen from the time you accept the buyer’s offer to the official transfer of documents on the closing date.
The full closing process, from offer acceptance to closing date, takes an average of 50 days. Plus, the National Association of Realtors reports that nearly one-third of closings are delayed, so it could be even longer.
One of the main reasons closing takes so long is because a buyer’s lender must originate and underwrite a loan. It’s a time-consuming process in which the lender determines if the buyer qualifies for the loan and can afford the home. While buyer financing often delays closing, the checklist for sellers is equally important.
Most closings follow this process:
Home inspections are not mandatory but most buyers insist on them to ensure there are no problems with the property that aren’t visible in a home viewing. If you accept a buyer’s offer, the home inspection comes soon after.
A home inspection examines the safety, functionality, and quality of the home and its features. Most home inspectors look at:
If sellers know of an issue, they should let their agent or attorney know of any needed repairs before the inspection. They may recommend making the repairs before the home inspection because if you don’t, the buyer may hold you liable to make the repairs as a condition of the sale, or take some money off their offer.
Most buyers borrow money to make a home purchase. In that case, the mortgage lender arranges a professional home appraisal so that the lender is confident that the mortgage is in line with the market value of the home. (In case the lender must foreclose on the house in the future.) A home appraiser uses the estimated value of the home’s individual features, as well as comparable homes that have sold in the area to determine the home’s true value.
If your home appraises below the sale price, lenders may not approve a loan for that amount. In that case, you can ask the buyer to make up the difference out of pocket, lower the sale price, or challenge the appraisal. Challenging the appraisal is time-consuming and may entail some costly legal fees, so consult with your agent or attorney before doing so.
The final walkthrough is a buyer’s last chance to see the property before closing. Most final walkthroughs occur 24 hours before closing and give the buyer and their agent a chance to ensure everything is in working order and that they’re confident with the price.
During a final walkthrough, the buyer checks that all required repairs have been made, the property is clean and hasn’t been damaged during the seller’s move, and that anything that is still in the home should be there. A buyer can back out during this stage of the closing process so it’s important to make sure everything is in order and compliant with the purchase agreement.
Finally, we’ve arrived at the closing date. On this exciting day, you or your designated legal proxy will sign a lot of paperwork, including the deed over to the buyer. The closing takes place at the office of your escrow agent, title agent, or attorney. If you don’t understand anything, or don’t know whether or not you have to be present, ask your attorney or escrow agent for an explanation.
Once all the paperwork has been signed and funds have been disbursed, you’ve officially sold your home.
If you read that section as a seller and wondered, “Okay, so what do I do during all this?” you’ve been paying close attention. Although the closing process tends to be more buyer-driven, there are still some important things for sellers to do, as well, some of which we alluded to throughout the last section.
One thing to explicitly mention is the title search. Before the closing process begins, your closing agent will order a title search, which is a review of public records to verify you’re the legal owner of your property. In most cases, this isn’t an issue, but if there are any claims or judgements against the property, the title search will uncover them, in which case you must resolve those claims before moving forward with the sale.
Otherwise, the closing process is straightforward for sellers. During this process you must:
Unrelated to closing, but some additional smart, courteous things to do include:
Some states might require additional closing items from sellers, like a septic system inspection or carbon monoxide detector certificate, so check with your real estate agent or attorney for a more precise closing checklist.
No, a seller does not have to be present at closing. Every state allows power of attorney to handle a home closing.
You do, however, need to prepare some things to make sure closing goes smoothly. To close successfully — whether you’ll be there in-person or not — you need the following items:
Again, you don’t need to be present at the closing so it may be suitable to make a copy of your ID and provide your attorney or escrow agent with everything they need to close the sale.
Buyers and sellers don’t have to be in the same room for closing or even sign the paperwork on the same day. There can be two separate closings on two separate dates, in two separate places. If you’re a seller who has already moved out of state, you can have your paperwork notarized and mailed back, or sign the paperwork through an approved online portal (in states that allow it).
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During the COVID-19 pandemic, people got used to remote life. Home closing was no exception. Prior to the pandemic, 14 states had permanent laws allowing for remote online notarizations (RON) and 31 enacted emergency RON measures.
When you remote close, you sign documents through a web portal or digital service like DocuSign. Provided the state allows RONs and both the buyer and seller agree to close remotely, this can be a great way to expedite the home closing process.
Another way to close remotely is by using a mobile notary. A mobile notary brings the closing documents to your home and handles the closing at your current location. You can also choose to receive documents by mail, sign them with a notary present, and send them back.
Finally, you can choose to have separate closings. That means a buyer visits a title company branch office and signs the closing documents without the seller present. The seller will then come at a later time to finish the odds and ends. (Again, a common method during the pandemic.)
Some separate closings are “witness-only” closings, in which the notary or an attorney comes to the buyer and seller, each sign separately, and the notary and attorney take care of the disbursements. In these instances, however, the person conducting the closing will not explain the documents you’re signing (hence why they’re not legal in all states), so if you’re a first-time homebuyer, you may prefer an in-person signing.
The bottom line: It doesn’t matter whether your closing is in-person or remote — you can still get it done smoothly.
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