The sale of a home is one of the most significant financial and emotional transactions that most people make in their lifetime. There are a lot of “moving parts” to a complicated deal like this, involving many people. It requires a lot from you as the home seller: you need to meet your commitments and be flexible and open to sudden changes.
While it’s essential to stick to dates and deadlines to avoid financial loss regarding closing costs, you should also expect financial and timeline adjustments to crop up and, above all, avoid the risk of selling your home privately. Doing so will help ensure that you get through your sale with as little stress as possible.
How Does Home Closing Work?
Closing the deal is everything after you’ve found a buyer. From the signing of the final version of documents to handing over the keys, this process is long but rewarding when done right.
In real estate, there are plenty of steps that come after the “handshake,” all significant to protect both buyer and seller.
From the buyer’s perspective, there are a few additional steps beyond what we show below. But from the seller’s perspective, the main steps in the closing process are:
1. Finalizing The Statement Of Adjustments
The Statement of Adjustments is the part of the home sale contract that includes the sale price, the deposit amount, the property taxes paid or owning, utilities, condo expenses, and other potential costs (for example, compensation for filling an oil tank by you before leaving).
While we’ve mentioned this first, the Statement may get updated a few times as all the rest of the closing steps proceed.
2. Home Inspection
Most home buyers, if they’re smart, will want a home inspector to make sure there are no serious issues with your property. The seller should be present for the home inspection in case there any questions or concerns that need answering.
If the inspector finds something, the Statement of Adjustments will likely amend to either include the repair work or reduce the sale price to cover the new homeowner’s costs for the fix. For major repairs, it can mean adjustments to the timeline.
3. Title Review & Title Insurance
The buyer will arrange for a review of the title deed for your property by a lawyer. The title review will make sure there are no outstanding claims on the home (for example, by relatives left out of the will in the case of an estate sale).
In general, the title search ensures that a guaranteed sale can legally take place. Additionally, title homeowners insurance will be purchased by the homebuyer to protect them in case something surfaces after the search.
4. Official Documents For Final Utility Costs, Condominium Costs, & Property Taxes
The new homeowner will need to give all documentation for anything in the Statement of Adjustments regarding utilities bills, property tax payments, and condo fees (if applicable). If there is any rental equipment on the property, like a hot water tank, they’ll want to make sure you’ve made all necessary payments for that too.
While they’re not legally liable if you haven’t paid your Hydro bill for six months, getting it sorted out can be a real pain for them.
5. Provide Access To The Home Before Move-In
Most home sale contracts will include a few clauses allowing the buyer one or two visits to the home just before they take ownership.
Giving the buyer access allows them to take a final walkthrough around the house. The buyers may want to take measurements for any renovations they’d like to have done before moving in. Make sure you’ve removed any “junk” and leave the home in a clean condition. Maybe hire a professional cleaner?
6. Prepare For The Move Out Date
It’s wise to book your movers as soon as you know the possession date, especially if your home is selling in the summer. Choosing the time you want can be difficult if you wait till the last minute, especially if you choose the first of the month.
Generally speaking, you need to move out by the day before they take possession of the home, not the date of ownership itself. In sporadic cases, this final closing date can change if the home inspector finds serious issues, and you need time to have them fixed.
7. Final Closing Wrap Up & Hand Over Of Keys
There are additional documents that get worked on throughout the closing process. These will be related to the Transfer of Deed and the financial transactions with your mortgage agent and the buyer.
Anything that hasn’t been signed needs to be dealt with by the time you’re ready to hand over the keys. Generally, that works through your realtor.
These steps display a very general outline, so be sure you understand all the steps. If you’re not 100% clear about when and what you have to do, ask your realtor.
How To Make The Closing Process Easier
Attention To Detail
If you don’t meet your commitments, you’re at risk of losing your deposit money. If a deadline can’t be reached, it’s critical to have your realtor write up the extension or withdrawal forms.
There are many parties connected to closing, including (but not limited to) lawyers or title companies, insurance agents, mortgage lenders, and inspectors. Proper communication with all of them is essential.
Yes, life is busy, and you’ve hired professionals to help you get the deal done. But that doesn’t mean you can assume everything’s happening on schedule. Understanding 100% responsibility for the closing will help you follow along and fill in any gaps that may open up.
You’ll have tasks to do too. For example, booking the movers and arranging for cleaning after you’ve moved out (whether you do it or you hire professionals).
Don’t assume anybody, but you, has your best interests in mind. Again, ask questions any time you are not entirely sure what you need to do.
Treat Dates Seriously
There will be a lot of dates to juggle. If you don’t meet them, the contract will often have financial penalties that are legally binding.
We always recommend the use of a lawyer to ensure that you are forever in compliance. Lawyers will ensure you’re protected, and you don’t lose any money.
Choose The Paul Rushforth Team When Selling Your Home
Selling a house is complicated and can be overwhelming. No matter what market you’re in, it’s vital to get the right realtor to help guide you through the process.. From determining how much your home is worth to the closing process, our team of real estate agents are here to help!
We invite you to contact us to arrange for an in-home consultation. You’ll learn what we can do for you before, during and after the sale of your property. With a team of over 30 in-house specialists, you can be sure we’ll support you every step of the way.