Closing is the final part of the process when ownership of your home is transferred to the buyer. Until closing, you are responsible for maintaining your home in the same condition as when it was shown, fixing any problems that are part of the terms of the contract and, of course, moving out. The last step is to pay the closing costs for the seller and hand over the keys.
What Happens between Accepting an Offer and Closing?
The escrow agent, seller’s attorney or title closer (depending on location) – will hold the buyer’s down payment and your title until all of the conditions of the sale have been met. Read more about escrow in our Resource Center article Understanding Escrow.
If you’ve had an inspection before you put the home up for sale, there should be few, if any, surprises. If you haven’t, pay close attention to the results. If any major problems arise, this could be a new point of negotiation.
The lender will want proof that they are not underwriting a loan for more than the value of the home. Learn more about the appraisal process in our Resource Center article, Home Appraisal Process.
Buyers usually want to take two walk-throughs. One prior to receiving their Closing Disclosure (about 5 – 7 days before closing) and a final look at the home within 24 hours of closing. They will verify that there has been no additional damage and that all agreed-upon repairs have been made.
What Happens at Closing?
Most of closing is about the buyer and their financing, as well as proof of title. It’s not a requirement for the seller to attend; sometimes the paperwork can be completed in advance. Requirements vary by state. You may decide to skip the closing, especially if you have moved away or negotiations were heated. If you choose not to attend, speak to your attorney or representative about signing the appropriate paperwork in advance and leave all keys and garage door openers to be transferred to the new owners.
If you decide to go, you’ll need to bring a government-issued photo ID, such as a driver’s license, copies of all keys, alarm or gate codes and garage door openers. Closing costs for the seller will need to be covered by certified or cashier’s check, if they are not deducted from the proceeds of the sale.
Any loans attached to the property will be paid off at closing. This may include a second mortgage or home equity line of credit (HELOC). Typically, the payment will come from the proceeds of the sale and your closing agent will contact your lender(s) to determine the payoff amount.
You’ll meet either the buyer or their representative at an appointed location, sometimes at the mortgage lender’s office or an attorney’s office. Both sides will end up signing several legal documents and then the ownership of your home will be transferred.
What Happens after I Hand over the Keys?
After your mortgage is paid off and the sale has been recorded by the local officials, you are no longer the owner of the property. Unless you’ve made arrangements with the buyer, it is expected that you will have completely vacated the property, removed all trash and swept the floors (sometimes referred to as broom clean).
Shortly after the loan is repaid, your lender should send you a “release of mortgage.” Keep this and all copies of the closing documents, as you may need them to prepare your taxes.
Your lender should send you a “release of mortgage.”
Understanding Closing and Closing Costs
After a buyer's offer is accepted, the next steps before closing are an appraisal, a home inspection and the final walk-throughs.
Closing costs for the seller will need to be covered by certified or cashier's check, if they are not deducted from the proceeds of the sale.
Not all sellers attend closing and requirements vary by state. You may prefer not to attend if you have moved away or negotiations were heated.
After the closing, you are expected to completely vacate the property, remove all trash and sweep the floors (sometimes referred to as broom clean).