Step 8: Closing on Your House
Remember way back in step one, when you were dealing with all the emotions that come from selling your house and trying to get your home ready to list? Now, you have an offer and it’s time to close. All those emotions you felt when putting your house on the market will likely come rushing back, only this time they’ll be intensified. Your home will soon belong to someone else. That moment when you close the door behind you for the final time is monumental. You may feel a mix of emotions like sadness, anticipation, uncertainty, and joy. There may also be some relief that the process is finally over, and you can begin your next journey.
Before that moment when you close the door on your empty home and head off to your new place, you must get through the closing. Most of the time, this is the easy part. However, there could be some small delays or even some major complications you might encounter. Let’s walk through the closing process so you’ll know what to expect.
What Is Open Escrow?
From the time that the buyer puts their good faith deposit into escrow until the sale is clear to close, the sale of your home is in a period called “open escrow.” During open escrow, many things can happen. The buyer is working out their final loan paperwork and forwarding it to the escrow company, and this process will continue until the sale is complete.
As the seller, your role during open escrow is to complete any repairs or make any changes to the property that were negotiated during the sale contract. You’ll also want to work out the transfer of utilities and make your preparations to move. One thing you shouldn’t do right now is cancel your home insurance. You want to keep your insurance until after the sale is completed.
The Final Walk-Through
Prior to the closing, the buyer will do a final walk-through. This isn’t an official inspection, but it’s a chance for the buyer to make sure you’ve completed all the agreed-upon work in the purchase contract. Unless you’ve worked out a delayed possession of your home with the buyer for after the close of the sale, this final walk-through will be one of the last times you’ll be inside your home.
Make sure all storage spaces, closets, and bedrooms are empty. Give yourself a few days between your move-out date and the final walk-through date. Aim to vacate the property two or three days before the buyer comes to inspect it. This will give you time to make sure you got everything (double-check the closets, attic, garage, and basement) and you’ll have time to deal with any issues that might arise when moving furniture out. Moving furniture can cause some damage, so inspect the floors, door frames, and walls after clearing out your home. Touch up any scuffs or dents before the walk-through.
To prepare for the walk-through, you’ll want to give your home one more good cleaning. If you can afford to, consider having your home professionally cleaned. This thorough, final cleaning should include things like vacuuming air vents, scrubbing the inside of the oven, and shampooing the carpets. Try not to leave any trash in the trashcan. If necessary, work something out with a neighbor or ask your waste disposal company to make a special pick-up.
While it isn’t necessary, consider gathering all appliance manuals and warranty cards and put them in one place for the new owner. You can even leave a “How-To” manual of sorts, with details about trash days, nearby restaurants, and cell phone dead zones.
The Closing Documents
If this is the first time you’ve sold a home, you may be surprised at the sheer volume of paperwork involved. All the closing documents prepared by the closing attorney, or escrow officer, need to be signed and notarized. You may feel as though you are buried in complicated legalese. What does it all mean, anyway? While every transaction is different and local laws vary, here are some of the documents you might see at the closing:
- Certificate of Title: This is a legal statement declaring you have the right to sell the property.
- Deed: This document transfers the title. Depending on where you live, this document could be called the warranty deed, grant deed, or something else. No matter what it is called, once the deed is signed, ownership is transferred.
- The HUD-1 Settlement Statement: This accounts for all the monetary transactions involved in the home sale. This form will be filled out by both you and the buyer, with columns for each. Be sure to go over this document carefully.
- Bill of Sale: An itemized list of everything that’s transferred in ownership, which could include things like furniture.
- Statement of Closing Costs: A description of the closing costs and a statement that you are aware and agree to them.
- Statement of Identity/Information: The Statement of Identity (or the Statement of Information) declares that you are who you say you are. A valid photo ID will be required.
- Loan Payoff: If there’s any money left to be paid off on your loan, this statement says that it will be paid off at the time of closing.
- Mechanic’s Lien: This document isn’t always included, but it’s a statement saying there’s no possibility that a subcontractor could have a lien on the house due to lack of payment. This document also states that anyone who was involved with prior repairs or renovations on the home have been paid in full.
- Final Closing Instructions: The closing agent will receive these instructions from the lender. This document may be signed at the opening of the contract or at the end.
What to Bring with You to the Closing
The closing attorney will bring most of the paperwork to the closing. Then, it’s time to sign, initial, and notarize. You’ll want to come prepared to the closing with a few things of your own, such as:
- The deed to the home (if the home has been paid off and there aren’t any liens)
- A government-issued photo ID, such as your driver’s license or passport
- A certified check for the escrow company
- The keys to the home
Even though you won’t have as much paperwork to sign as the buyer, each document is vital. Look everything over carefully and make sure all monetary accounting of the transaction adds up. Make sure the date of possession works for you. You’ll also want to double check the buyer’s loan to make sure it’s funded.
Transferring the House Keys
You may never actually meet the person buying your house. The buyer usually does the final walk-through with either their agent or your agent. When it comes times to close, you’ll bring the keys to the escrow officer/closing attorney’s office and hand them over once all the paperwork has been signed. Since the buyer will likely close at a different time than you, the keys will be delivered to the new owner once the deed is registered by the county.
You’ve just completed your home sale! All the cleaning, staging, photographing, showings, negotiations, and paperwork have brought you to this point. Hopefully, you’re looking back on the journey and thinking it was all worth it. Good luck in your new house!