Selling your home can be a lengthy process, but closing the sale is a whole other ballgame. In addition to the repairs, inspections, and showings you already have to deal with, this part of the sale comes with another set of responsibilities and procedures for sellers.
Keep reading to learn exactly what closing on a home sale looks like for a seller, and how to avoid the hassle.
What does it mean to close on a home sale?
A house closing is the process of officially transferring ownership of your property to the buyer. To do this, the escrow company collects the funds and necessary documents to complete the sale.
Multiple steps go into the house closing process.
The house closing process for sellers
Each step of closing is vital to completing the sale with the mortgage lender and buyer. Some steps are more lengthy than others and can even come with added costs.
Here’s what you can expect from beginning to end.
1. Accept the buyer’s offer
To start the process, a buyer will need to make an official offer that you will need to accept and sign. This step outlines the sale price, any required repairs, which appliances are included, and provides a closing timeline.
2. The buyer makes an earnest deposit
Once you’ve accepted the offer, the buyer will deposit their earnest money into an escrow account. Think of these accounts as savings accounts that are handled by the mortgage lender.
With these, the buyer will deposit a partial mortgage payment into the account each month to cover taxes, mortgage payments, and homeowners insurance.
3. Search your property’s title
Next, you’ll need to contact the title company to ensure that it’s clean. Doing title research is essential to making sure the title is in the correct name and able to be transferred. While problems with titles are somewhat rare, about 25% of searches uncover an issue.
Any problems with the property title will need to be resolved before the closing is complete.
4. Complete a home inspection
Most lenders require a home inspection to finalize the mortgage loan. These are conducted to determine the condition of the house. A licensed inspector will come to the property to thoroughly examine the interior and exterior of the home.
They’ll look for:
The type of problems they inspect play into the value of the home. More importantly, though, they determine whether the home is safe to live in according to your state’s laws.
5. Renegotiate the price
Depending on what the home inspection reveals, the buyer may ask to renegotiate the price. It’s up to the seller to decide whether or not to make repairs or lower the price.
6. Get an appraisal
One of the last steps you’ll need to take is getting your home appraised. This involves the lender and seller, and the lender sends a professional appraiser to evaluate the property. They’ll appraise your home to assess its fair market value.
This is another step that could affect the final sale price of your home and can even cause the deal to fall through.
If the appraisal is too low, the buyer may ask you to lower the asking price. But if it comes in higher than expected, the lender may decide not to complete the transaction because they can’t loan more than the buyer was approved for.
7. Closing day
After all of the above steps are completed, you can finalize the sale. You’ll need to sign the final paperwork and provide the keys to the property.
What you need to know
In addition to knowing the right steps to take, there are some other details you need to know about the closing process as a seller.
How much does closing on a house cost?
The closing costs are shared by the buyer and seller. The seller pays the real estate commission fees for both selling and the listing agent, which is 6% of the home’s value.
Here are a few more expenses that sellers are responsible for:
- Transfer tax
- Half of the escrow fees
- HOA fees
- Title insurance
How long does the closing process take?
On average, the closing process takes between 30 to 45 days to complete. However, it can take even longer if issues are found during the inspection or if you need to renegotiate after the appraisal.
How can you avoid the hassle?
Closing a house sale doesn’t have to be a headache that’s full of expenses and extra responsibilities. By selling your property off-market, you can close in as little as 10 days!
Going this route means you’ll sell to a property investor who will charge little to no fees. Instead, they’ll make you a cash offer based on the as-is value of the house.
If you sell with Simply, things get even easier because we offer the highest prices based on the market value, and we don’t charge any hidden fees.
Request your offer now to get started!