House Closing Process From 40 Years of Experience

 In The Closing Process

This is our guide for the real estate closing process based on 40 years of experience and more than 50000 successfully closed real estate transactions. You will learn everything you need to know about it to fully understand how to go smoothly through all its steps.

This tutorial will also guide you through the information and terms you need to know about during the closing process.
From buyers and sellers rights and obligations to the actual house closing process and house closing day itself.

After reading this article, you will know how to go through the closing process smoothly and efficiently.

real estate closing process

Closing Process

So, let’s start with answering a question: ”What is a real estate closing process?
You may understand it best when thinking about completion or settlement terms.

The ownership of the property being sold is transferred to the buyer on the closing day. While the overall house closing process may last a few weeks, depending on your particular circumstances, this article gives buyers a few tips and tricks to increase the speed of closing by taking steps that reduce delays.

Who is involved in a typical real estate closing transaction?
There is the seller, and often, his or her real estate agent. The buyer, who is arguably the most important part of the sale, also has his or her real estate agent involved in the transaction.

Additionally, most of the time a bank or a lender will be providing the balance of the financing that the buyer is not paying for from his own pocket (the buyer’s “equity”).

What the seller does on closing day for a house is sign the deed and to give the keys to the buyer of his new home.

What would be the responsibility of the seller’s real estate agent?
Of course, it is very important to have a professional that will guide a seller through the closing of a real estate deal. The agent should get the highest possible price for the property, and besides that, to set the best terms for their particular situation.

Although the buyer’s agent represents the interests of both sides, the role tends to work on behalf of the buyer’s interest to lower the price for the buyer by noting defects in the property or negotiating for additional concessions that are favorable to the buyer.

Preparing and recording the documents is what settlement agent or title company is responsible for, and also managing the overall closing process.

We have also mentioned having a lender or a bank in the closing procedures.
They lend the money to the buyer and impose conditions on the buyer that restrict how much money the borrower can access and under what terms.

Now, we will continue explaining some of the most important definitions you should know before reading further about the closing steps.

We will also answer many popular questions and by the end of this guide, you will know everything about the real estate closing process.

Closing period

The period of time in which the entire closing process is completed: from the time the escrow is opened with the title company to the final stage when the paperwork is recorded in the courthouse.

The average time for closing on a house varies widely, from just a few days for a cash sale to upwards of six weeks when there are legal financing issues to be settled prior to closing.

Home inspection

For most residential property purchases, banks will require (and so will most buyer’s agents) an inspection of the property for serious structural problems.

The home inspection professional will evaluate the condition of a residential property by crawling under, on top of, and throughout it, making notes on the conditions of key systems and structures, such as the foundation, roof, HVAC system, etc. An average time for home inspection usually lasts for 2-3 hours.

What happens after the home inspection?
If the inspection turns up evidence of structural issues, then there may be some situations where the seller needs to negotiate a lower price with the buyer – but we will talk about that instance later in this guide to the steps of the closing process.

Closing date

What is the closing date?
It is the day when the ownership is legally transferred from the seller to the buyer in an event called a closing that also includes all of the agreements regarding mortgage financing of the property.

Let’s move from an overview of the process to a more detailed examination of the key steps involved in closing a typical real estate transaction.

PRE-CLOSING STEPS

Closing process

The house inspection

Everyone who is purchasing a home wants to be absolutely sure that there aren’t any major flaws that would make the home unlivable or unsafe.

That is why the average time for home inspections needs to be adjusted to the house’s size, buyer’s requirements and wishes and, of course, the house characteristics.

You will have a professional that will write down the summary of his findings. Besides that, we would highly recommend you to get a termite and pest inspection too.

If you live anywhere where termites are common, whether South Louisiana or anywhere across the Gulf South, your lender will likely require a termite inspection in any case.

Appraisal, survey and the title insurance

Banks are heavily regulated and there are a number of rules that govern their loan making procedures. One of their core requirements is having an independent third party estimate the value of your property: a licensed, professional appraiser.

The appraiser will verify the total square footage of the property, identify properties that are similar in size and condition within the relevant market that have recently sold and create a value estimate for the property. Banks typically use the appraisal to guide their lending decisions based on a percentage of the property’s value.

For example, a conventional mortgage would provide a loan of no more than 80% of the property’s appraised value. If you are buying a property using your own money, then although you do not have a bank or mortgage company asking for an appraisal, you still may want to have one to verify that the sales price is fair, given the condition of the property.

The lender may also order a survey to verify that the land being sold matches legal records for it. The most important part of buying property is knowing what exactly you have bought!

To that end, there is an insurance product that gives the buyer an additional level of security so they know how they are protected in case of any error or omission during the closing process by any of the many people involved: title insurance.

While you are not required to buy title insurance if you pay cash, most lenders will require it when you are borrowing money from a bank or mortgage company.

For your own peace of mind, you should always buy it – it’s a one-time cost that protects you throughout the time that you own the property and it will help to keep you safe from unforeseen title claims.

Title research and title company actions

The title company will be working nearly simultaneously with the above steps to review the legal property records associated with the proposed home sale.

The company’s Abstractor (the person who specializes in researching courthouse documents for tax liens, property sales, marriage and divorce documents and other relevant files) will build a detailed chronological history of the property’s ownership.

The reason for doing this level of research is to verify that the person is selling to you is actually the owner of the property and there are no outstanding owners who may claim that the sale was fraudulent later one.

In addition, a property abstract can uncover unpaid tax or other legal claims (called “liens”) that need to be paid before the property’s ownership can be transferred.

Also, the title company will be building a detailed file on the property to collect information coming in about the property from all of the parties involved in the transaction.

They hold this information to verify how there are no holdups or impediments to the sale (and to notify the relevant parties to the transaction when there are issues to be resolved).

Mortgage underwriting

For most buyers, the mortgage process takes the most time and has the most headaches involved, simply because of the requirements to gather the personal financial details that lenders need to feel comfortable loaning you money. Mortgage companies don’t simply lend money easily.

Although they advertise heavily about having money available, the reality is that obtaining a home loan requires having good credit, documentation of your assets, bank accounts, employment history and outstanding debt obligations.

Because mortgage company approval (in a process called “underwriting”) can take a fair bit of time, mortgage companies offer you the option to be “pre-approved” —basically giving you a quick overview of the maximum amount they would consider loaning you, given a few pieces of information.

Getting pre-approved for the mortgage is important for helping you to understand what your maximum home buying budget should be. Check our mortgage estimator.

Steps to closing on a house

steps to selling a house

Verify your mortgage and closing costs

There are a number of fees that are assessed anytime a property is bought or sold. You have mailing fees, appraisal review fees, administrative fees, processing fees, the settlement fees and the list goes on and on.

Don’t be afraid to ask what each fee is for and if any discounts are available. In many cases, the answer is no… but occasionally you will be surprised what can be negotiated.

Resource – Closing costs calculator

Verify the purchase price

Let’s say that the home inspection and pest inspection process is done. You may not be satisfied with the findings, so you may renegotiate the sales price if you have a home inspection contingency included in your purchase agreement.

Another option is to pay the agreed-upon price, but require the owner of the property to pay for all the repairs that need to be done. Remember that when you are buying a home ”as is”, you don’t have as many rights to ask for those repairs as you would be able if you have the home inspection contingency in the first place.

Locking an interest rate

Now, that all those steps have passed, you must lock in the mortgage interest rate. The most important thing in this step is to listen to your lender who will help you to realize what is the best time to get the lowest interest rate possible.

Consider using a mortgage calculator to check your monthly payment amount under different mortgage options (lower rates with a shorter term or higher rates but with a longer repayment period).

mortgage loan estimator

Don’t forget that insurance and property taxes may add a substantial amount to the amount that you will pay the bank for your mortgage.

Remove any contingencies

Let’s say that you have a great purchase offer that your real estate agent draws up.

Be sure that the seller is willing to make all the repairs within the time period allowed by the contract or else the contract will expire and you will need to draft a new one (and potentially begin negotiations all over again).

Escrow in funding

After all of these steps are done, you will most likely make a good faith deposit once you sign the purchase agreement.

The deposit shows the seller that you are serious about buying your new home and that you are putting your money where your mouth is (so to speak).

Playing fair is the most important thing in this process, so both sides can stay satisfied. Your real estate agent will help you here to estimate a fair deposit amount. In most cases, this amount is not set and can be the subject of negotiation.

The final walkthrough

You have made a decision that you will buy that home, but what you need to do once everything is ready is that you have to make that walkthrough to be sure that everything is as you have agreed upon.

You should check it to be sure that nothing was removed from the house which was already included in the purchase (such as appliances, washer, and dryer, etc).

Besides that, you will also want to be sure how all the required repairs have been done on time and to the right level of quality.

Signing the documents

FINALLY! This step in the closing process is when you legally become the new owner of a home and commit to paying the mortgage. You can expect approximately 100 or more pages of legal documentation covering all of the legal aspects of the transaction.

signing the documents

You will have to sign A LOT of them. How much is a lot? It depends, but most people feel like a Hollywood celebrity signing autographs by the time they’re done.

Everything done up to this point has been to make your experience legally compliant and clear. Stay patient, ask your closing notary or attorney questions about the different types of documents you need to sign and feel free to read carefully anything you have concerns about.

Also, you need to be well aware how fine print will make a huge impact on your financial status in your life and in your new home. Before the closing, be sure to use a property tax calculator to double check the costs that you will be obligated to pay as a new homeowner.

Remember that changes can occur to the closing costs on you were given with the Closing Estimate Form and the actual Closing Disclosure Form you were given at the closing.

Ask questions about what changed and why. Normally any changes you see are normal adjustments to estimates as actual conditions were discovered, but verify them to be sure.

Paying the closing costs and escrow

Paying for the property (even when it’s a “cash” closing) requires a bank certified check to prove that the funds are available for the total amount needed to close on the property.

Closing costs on all cash home purchase include seller’s paying for all the listings and for the buyer’s agent commissions.

If you are a seller and want to save the thousands of dollars, it’s worth searching for listing agents with a track record of success willing to accept 1.0-%-1.5% listing fees.

The keys

Congratulations!
You are now either the new owner of your beloved home or you have sold your property smoothly!

home closing process

All in all, as you have seen, the process sounds complicated, but most of the time you just wait for the many professionals involved in the transaction to do their jobs.

While sellers have less paperwork to worry about than buyers, both buyers and sellers have the advantage of having many technical specialists working in the different parts of the real estate closing to ensure an efficient transaction.

After the legal documents are signed, they need to be recorded with the government so that there is a record of the property’s title having been successfully transferred as well as attachments (such as mortgages) to it.

In addition, all the funds that were held in escrow and owed to the seller will be distributed to him.

If you are a buyer, closing on a house will end up with great results if you follow our instructions. You will get the home you have dreamed of and within your budget.

Closing on a house for the seller will require even less work because there aren’t many documents that the seller needs to worry about. If you are a seller, just make sure that you have found the right agent and that you have used a reputable company for house inspections. Play fair and follow your real estate agent’s advice for the best results.

What does the real estate title company do?

what does a title company do

Turning now to the company that sits in the middle of the transaction, the settlement agent, lawyer or title company (different parts of the country use different terms), we will review some terms you need to know about their work.

Title search process and title company check

Before approaching the mortgage lender, the buyer should know the essentials of the title process. You need to be sure that the property has clear title and no known issues when you buy it.

The title company will perform a few steps that are fairly standard across the US. The first task is to verify ownership. This is the most important task in terms of making absolutely sure that the person selling the property has the right to sell it and is who they say they are.

If the home were, for example, left to children after the death of a parent, then the title company has to verify that there are no missing heirs (children born out of wedlock, for example).

Another common issue is name changes, particularly for women after marriage or people trying to escape prior judgments. Finally, sometimes people lie about who they are and attempt to sell property that they do not own.

Unpaid taxes, judgments or liens on the property can cause headaches for buyers and the title company has to research them to verify that none of these issues exist prior to the sale.

A lien is simply a legal claim filed against the property that must be paid prior to the property’s being sold. It’s common that there may be unpaid taxes from previous years that must be paid prior to sale and can be subtracted from the agreed upon sales price as part of the agent’s negotiation.

We have already talked about the property’s inspection, but be aware that the results are often shared with the title company (especially if there is a mortgage involved). The results form part of the due diligence into the property’s condition.

Be sure to discuss the results with your realtor when buying your home. These results can help you to negotiate better terms, particularly if the roof, air conditioning, or foundations have problems.

Verifying the all prior mortgages and judgments is another absolutely crucial element of the property’s due diligence prior to closing.

Many title insurance claims involve missed mortgages, where the creditor still wants to be paid, even though, for example, the mortgage deed was misfiled in the courthouse by the government itself.

Simple errors like this may happen and cost homeowners thousands of dollars without title insurance.

The benefits of the closing company and its policy

The title company will help you to sell easily and to buy safely. The title policy will cover problems that haven’t shown up when the title examination was done.

While accidents and oversights do happen (that’s why title insurance makes so much sense), a professional title company and closing agent will minimize the chances for such errors to occur.

Title insurance

No one wants to be in a situation where they purchase a home and then have a conflict with someone who claims that the house is still theirs and the title transfer was invalid.

It may happen from a small error in the closing process, from outright fraud by the seller or unknown heirs opposing the sale. Title insurance will protect you against any losses that may occur from this type of event and often as well from the costs of defending against these actions in court.

The title company will have state licensed title insurance agents who can explain the costs and benefits of using title insurance.

Because a home will be the largest investment for most people in their entire life and because title insurance is a one-time payment at closing, the decision to buy should not be very difficult.

Invariably, however, people will try to “save money” by not buying title insurance, only to find a problem later that is severe enough to cost them their home. Don’t cost yourself the value of your property by saving some amount upfront.

Everything a buyer needs to know before buying a home

first time home buyer

In this part of our ultimate guide to the closing process, we will explain you everything that you need to know when you are buying a house for the first time.

In case you are not a first time home buyer,  you can check what you can do better in this process and perhaps learn more.

The first thing the buyer needs to ask himself/herself is what home can he/she afford.
Consider how much you can pay right now for a down payment.

You should also consider your job’s stability and existing debt levels.
You want to be sure that you will be able to cover it all without any problem.

That is exactly why you need to know everything about your credit score and payment history. If you are thinking about buying a property without a real estate agent, then you should know all the steps that you will go through by yourself.

But, you shouldn’t be worried, because we will guide you through the whole process providing you a first time home buyer advice.

The next thing you need to know is how to select the best advantageous mortgage lender. When talking about the first time buyer mortgage, you need to understand how each lender is different.

There are independent mortgage companies that can make over the half of all the home loans. That includes FHA-insured loans and VA-guarantees. You may also find a saving institution offering a first time home buyer saving plan.

These institutions originate about a quarter of home mortgages. Commercial banks and credit unions (if you are a member of the union) are also an option. Mortgage brokers may interest you too.

They keep tabs on the mortgage market so you can refer prospective borrowers to a commercial bank, savings institution or mortgage company, as needed by the situation.

10 things to consider when buying a house

In this part, we will show you how such process looks like, and also, we will guide you through the most important steps.

1. Find a good real estate agent

Finding your dream home begins with finding a realtor who knows the market where you would like to live – what’s available, what are buyer and seller trends showing, what pricing will minimize your costs while maximizing the chance of successfully buying the property.

how to choose a realtor

You’ll need to find a real estate agent who not only understands your needs and budget but also your lifestyle and design preferences. Good agents are your eyes and ears, frequently bringing you properties that may not even be publicly listed yet.

Chose your realtor like you would your family’s doctor: meet them, ask questions and be prepared to look around if there is not a good fit. Here are some rules of thumb for looking for a real estate agent:

  • Always be sure that the agent has the good credentials. You can ask for their awards and licenses, for example.
  • Be sure that you talk to the past clients to verify that their experience was smooth and pleasant.
  • Be aware of red flags and anything that’s too good to be true.
  • Never pay anything upfront for searching for your dream home. A real estate agent will be paid at closing when you become the owner of your home.
  • If you are a seller, then your realtor checklist should include house cleaning, pre-listing checklists, home staging and real estate listing photos and text, as well as setting up house viewing and facilitating the home inspection.

2. Take your time to search for your new ideal home

You can be sure that your real estate agent will be able to find as many homes as you need, but you are the one that has to decide on your preferences.

You cannot make an offer if you don’t know where would you like to live. Maybe you have already chosen your new neighborhood, but if you haven’t, you can think about the condition of the houses you are searching for with your real estate agent or by yourself.

What is the traffic like, for example? Are there any schools nearby? Is it a peaceful neighborhood?
Buyers looking for homes claimed how such ”small” questions helped them to make a conclusion.

In many cases, your dream neighborhood may not have your dream home and vice-versa.

For this reason, always give yourself the wiggle-room to look in adjacent neighborhoods for your ideal home or to take on renovation projects in your target area that would give you your dream home, although likely with a longer time frame.

3. Make lists

Make three lists of what your dream home should look like.

  1. The first list may show your biggest needs (for example the number of the bedrooms)
  2. The second list should show what you don’t want in your new home (like small bathrooms)
  3. The last list should be something that would make some house your new perfect home (fireplace, greenhouse, or skylights for example)

This list is not only helpful for your real estate agent, but it gives you a practical basis for assessing what your residential real estate needs and wants truly are.

4. Get pre-qualified for a loan

Apply for your loan early. You don’t have to know exactly how much you want to borrow. Get pre-qualified to understand what lenders will let you borrow before you fall in love with one home.

Once you know how much you can borrow and you have found a home that is less than that amount, you’ll be ready to apply for your actual loan, which will involve a lot of paperwork to document your income, assets, and debts.

mortgage pre qualification

Once approved for the actual loan, you will receive a loan commitment letter from your lender. The title company doesn’t normally receive this letter.

They will receive a loan package from the lender for you to sign during closing that lists all key terms and legal language around their loan to you.

Make sure to remain in communication with your lender to verify when to expect your loan commitment after you’ve submitted all of your paperwork.

5. The offer

When you find the home in a neighborhood that you want to live in and are ready to submit an offer, your agent will help you to make a reasonable offer that won’t insult the seller, while negotiating for seller concessions, such as paying for the home inspection or closing costs.

In reality, there may be multiple purchase agreements for a property in a hot location, so pay attention to competitive pressure when trying to make your purchase offer as attractive as possible.

Both buyer and seller agents will know what similar properties have sold for recently.

Buyers will want to make sure that the comparison homes are of similar condition and in similar locations, while sellers will want to check price trends and the time that has passed since last sales and any unique features that they believe buyers would pay extra to have.

Buyers will be looking for the best ways to lower the offer price, while the sellers will be looking to maximize it.

6. Earnest money

Let’s say that you and your agent have agreed to an attractive offer price. You now need to think about your earnest money deposit.

You want it to be large enough to show that you are serious about buying the property, but not so large as to tie up significant resources for the duration of the purchase process.

Often, just 2% of the purchase price needs to be deposited to show good faith interest in the home.

7. Apply for your loan

At some point during your offer acceptance stage, you will apply for an acquisition loan for the property.

Expect 1-6 weeks for the lender to work through their due diligence process and for you to collect all of the required documentation.

The faster you provide the information that is needed, the faster it can get processed. If everything went well then that is often the moment when the home buyer closing date is set.

8. First time home buyer closing costs

The closing costs may be different, but they include fees held in escrow and closing cost fees (both yours and the lenders), any taxes due on the property, survey and recording fees, interest, the title insurance premium (both your and the lender’s), loan discount points, and documentation preparation fees.

9. The day of closing

What can you expect to happen on the big day?
The closing agent will do all the work, so don’t worry.

It is up to you to bring a homeowner’s insurance policy you have paid, so the money can be paid to the seller.

The seller will provide you the keys and any additional documentation needed for the property (such as proof of completed renovations.)

closing day

10. Plan for a closing day

The buyer’s closing statement includes the Closing Disclosure Form and Closing Estimate Form, mortgage note, deed of trust (or a mortgage sometimes), truth-in-lending statement, copies of all those documents you have signed before closing and, of course, the keys to your new home!

Tips and Recommendations for Home Buyers

In this part of the buyer’s side, we will share some of the best pieces of advice for buying the home for the first time.

Besides that, we don’t want you to get in an uncomfortable situation, and that is exactly why we will also share some crucial mistakes people tend to make in this process.

Tip 1

NEVER COMMIT BEFORE YOU ARE ACTUALLY READY

You know that owning a home is a huge commitment. The things you need to know about owning a home are numerous, but we will make it simple for you. Think about your monthly mortgage payment in the first place.

Now add 40% to that amount to cover taxes and insurance. You need to be absolutely sure that you will be able to pay for such property. And by paying for it, I also think about being able to pay bills later, keep your home in a condition you want etc.

Your loan officer will discuss these points with you and keep the loan within their lending guidelines.

Tip 2

HOME IMPROVEMENTS

You can save thousands if you are able to remodel your home by yourself. All that you need is patience and creativity. People tend to pay more for move-in ready houses, and that preference can cost you a lot.

The move-in ready house may look a lot better than ones that are dated, but if you are open to the challenge, either do it yourself or hire a contractor to make it your own. The cost savings can be substantial and you will have designed the home to reflect your tastes.

Tip 3

DOWN PAYMENTS

Make sure that you have enough money set aside to actually buy a home, even if you have to ask your parents for help. The first home is often the hardest step on the property ladder and it’s largely because of the requirement to have a substantial down payment.

Many programs exist to give first-time homebuyers help with the down payment, so look around your area and talk to your mortgage banker to see if you may be a good fit for any that are offered.

Tip 4

IS IT WORTH IT?

The best way to buy a home for the first time is to ask yourself is it actually worth it?
Be sure that you pay for what you want and need. Remember the little tips we gave earlier in this article.

Tip 5

KNOWING THE PROCESS

It is important that you know enough about buying a house to buy with confidence, and thanks to our ultimate guide, this is where you are rapidly becoming an expert!

Tip 6

YOUR CREDIT AND FINANCES

Get them in order as soon as you can. Unless you have good credit (it’s not necessary to have perfect credit), you’ll find the loan process to be even more frustrating than it already is.

Tip 7

THE DEAL BREAKERS

If you want to find the best deal for first time home buyers, then you shouldn’t forget about deal breakers: anything that would make you walk away from the home, whether major repairs or legal issues.

Remember to have a home inspection contingency in your purchase agreement and then actually get your home inspected prior to closing.

The deal of a lifetime comes along once a day, as the saying goes. Don’t get too hung up on one property if there are other opportunities with fewer headaches.

Tip 8

NEGOTIATE

If the home inspection turns up any substantive issued: renegotiate the purchase price or walk away from the home.

If the structure (foundations and roof) and air conditioning system are in good shape, however, then almost any other issue uncovered during the inspection should be easier to negotiate around.

Tip 9

WORK WITH EXPERIENCED PROFESSIONALS AND UNDERSTAND WHAT YOU SIGNING

The reality of the paperwork is that much of it is boilerplate legal text that would put most attorneys to sleep.

But it’s your name on the deed and mortgage, so make sure that you understand what you are signing, especially the terms of the loan.

Tip 10

ALWAYS BUY A HOME THAT YOU CAN AFFORD NOW

People tend to buy a house they can afford later, but not now. There is when you can get in the kind of debt that can be dangerous. Be realistic and use your head, not your heart.

Since most mortgage companies are now underwriting at fairly strict levels, it’s much harder (though not impossible) to take on too much housing debt in most parts of the country (excluding coastal California and parts of the Northeast).
Here are some common buyer’s questions that we are frequently asked.

Questions for Home Buyers

Some of the common questions home buyers are asking.

FAQ 1

DOES EARNEST MONEY GO TO CLOSING COST?

You can understand earnest money the best as thinking of it as a buyer-paid deposit.

The funds may be kept in a non-interest-bearing escrow.
It will be kept there until there is a closing or the purchase agreement expires.

If the deal fails, your earnest money will be given back to you, of course, minus cancellation fees.
In the other case, it goes to closing cost.

FAQ 2

DOES FIRST TIME HOME BUYER PROGRAM WORK?

There are many programs targeted to first time home buyers.

Many cities and states offer down payment assistance and there are non-profit groups who offer a range of options, from soft-second loans (in which the borrowed amount is forgiven over time) to interest rate buy-downs (a payment at closing that lowers the interest rate on the loan) down payment assistance.

Look around for programs in your area and verify that you qualify. In many cases, these programs have income or other restrictions.

FAQ 3

WHAT DOES A PROPERTY TITLE LOOK LIKE?

The property title is just the closing document that shows a buyer and seller’s signature and date, along with a notary or attorney’s signature that attests to the legal nature of the transaction.

This document is filed in the local courthouse as a public record to prove ownership now and as part of the property’s history for future sales on that home.

FAQ 4

HOW LONG DOES A TITLE SEARCH TAKE?

A title search can be a quick affair if you just need the names that are published in the government’s records. In some cases, it can be a 30-minute procedure.

On the other hand, properties with complicated prior sales or problems in the chain of title can take a week to research and properly clear.

FAQ 5

HOW LONG DOES IT TAKE TO GET FROM YOUR OFFER THROUGH CLOSING?

Most people can close on their home within three weeks of their offer, though a lot depends on lender requirements and your ability to provide documentation in a timely manner.

Home Selling Process

home selling process

Now, we came to a part of our guide where we will explain everything the seller needs to know about the house closing process. If you are the first time home seller, then this information will make your home selling process a breeze.

We will provide you with an overview of the legal steps to selling a house and home sale process.

As a seller, you are focused on maximizing the total paid for your property, as well as minimizing any taxes due on it.

If the property is your primary residence and you are not in a very high-priced part of the country, then in most cases there is no tax consequence to your sale.

The first $250k if single or $500k of gain if married and filing jointly is tax exempt (see IRS guide 523 for more information: https://www.irs.gov/publications/p523).

Consult your tax advisor about your specific circumstances. Seller closing documents will require from you to answer some questions that also affect your taxes.

It is important to tell if you have bought that house by yourself earlier or it was a gift, have you used it for your own purposes or maybe for some business or as a rental, as well as records of home improvements that were done to your property.

Sometimes a seller may pay down part of the buyer’s loan points. In this case, seller paid points may have tax consequences for you.

The Internal Revenue Service maintains an extensive library online of real estate publications that will help you when researching tax issues that are relevant to a real estate transaction. The guides listed below are among the most commonly referenced:

  • ”Moving Expenses” (521)
  • ”Selling Your Home” (523)
  • ”Residential Rental Property” (527)
  • ”Depreciation” (534)
  • ”Tax Information on Partnerships” (541)
  • ”Basis of Assets” (551)
  • ”Federal Tax Information on Community Property” (555)
  • ”Determining the Value of Donated Property” (561)
  • ”Individual Retirement Arrangements” (590)
  • ”Bankruptcy and Other Debt Cancellation” (908)
  • ”Home Mortgage Interest Deduction” (936)

Steps to selling a house with a realtor

steps to selling a house with a realtor

The time of the year

Be aware that homes sell at different speeds at different times of the year. If you are going to sell your house in the winter, for example, then be aware that is exactly when sale times are the slowest.

That said, sometimes you can get a higher sales price for your home in winter because there are comparatively fewer properties that are put on sale in this part of the year.

Each home is different, so you’ll need to discuss your home and any seasonality with your broker to determine if it’s relevant to your circumstances.

Preparing your home

Selling your home may require you to commit to spending money to make it look its best.

What do you need here?
Fix obviously broken things, replace burned out light bulbs, hire a company to clean the exterior of the home and be sure to do landscaping. You may want to consider what a home inspection will uncover.

By fixing known issues, you’ll maximize the potential sales price and reduce the time that your home is active in the market.

Finding the listing agent

A great listing agent will help you to sell your property much quicker and for a higher price. The real estate agent knows the selling process well and can act in your interest throughout it.

Pricing your house

The main point of all of your selling efforts is to maximize the sales price of your home.

Although your agent will be the main guide to what the market is currently supporting, be your own advocate and note any standout features of the location or property that can support a higher asking price.

Conversely, if you need a quick sale, let your agent know. Sometimes they can move bargain properties very quickly.

Photograph your home

You have seen bad pictures of homes for sale. The most common photo problems are the cluttered interior, bad lighting, and blurry images.

Think of your home as a superstar that will be featured in a magazine!

  • What photos will make it stand out?
  • When is the best time of day for the photos?
  • How much of your personal effects should be in the pictures?

Don’t forget to use the social media marketing for such purposes and use the signs such as ‘for sale’ or ‘open house’.

Seller presence

Does the seller have to be present during showings of the house?
It would be better not to be present. It may make your potential buyers a bit more nervous.

Let your house speak for itself. Make the best of it, and of course, keep it clean when the potential buyers arrive.

Reviewing the offers

Take your time and review all the offers you got with your real estate agent. You’ll find that many offers will come with contingencies, such as financing or the home inspections.

When talking about financing contingency, the buyer wants to be sure that he can secure a mortgage, and if they can’t, then the purchase agreement will expire with no other consequences.

The inspection contingency just allows the buyer to review the results of a home inspection in case any materially significant issues are found that would require negotiations over the price or potential repairs.

Preparing for the big day

After accepting a purchase offer (and any acceptable contingencies), selecting your title company, securing an earnest money deposit and agreeing on a closing date, you need to make sure that you have contacted your homeowner’s insurance and utility companies to end service as of the date of closing.

In addition, and this goes without saying, be sure that you have planned your own move to your new home, including turning on utilities in the new location, scheduling mail forwarding to the new address and scheduling the movers in advance of closing – don’t wait until the day of the closing to move.

After the closing, you no longer own the house and may have to pay rent to the buyer for the period in which you are occupying their home.

Post-Closing

post closing

The final stage of the selling process involves staying positive and verifying that there are no hiccups post-closing. You will get your payout without the legal and brokerage fees and sign some papers.

You should verify the amount you received against the settlement statement.

Congratulations! You’ve successfully sold your home.

Tips and Recommendations for Home Sellers

Although we have covered a lot of ground in earlier parts of this guide, there are other tips and questions that are worth keeping in mind.

Tip 1

HOW LONG IN ADVANCE OF THE SALE SHOULD YOU BEGIN TO MAKE IMPROVEMENTS?

To be safe, give yourself at least 12 weeks to identify and fix any issues around the house, make repairs, take photos and work with your agent. Don’t wait for the last moment to start with making the needed changes.

Tip 2

HOW LONG FROM CONTRACT TO CLOSING?

The average time from contract to closing three weeks, though there is a wide variation depending on specific buyer’s circumstances. You can speed up the process by resolving all the issues that may appear, addressing the repairs and of course, keeping up clear communication your real estate agent.

Tip 3

HOW LONG DOES IT TAKE TO SIGN THE CLOSING DOCUMENTS?

As we have already mentioned, as a seller you have a lot less paperwork than a buyer. Closing is fairly quick and painless, over in an hour or less.

Tip 4

HOW LONG DOES IT TAKE TO CLOSE ON A HOUSE AFTER THE OFFER IS ACCEPTED?

If it is about paying in cash, the buyer could close as fast as the buyer and seller can agree on terms. The financed offers are closed in around 30 days.

If there are many complications, the process may last for even longer, but the right seller’s agent can help to move the process along as quickly as possible.

Conclusion

A real estate closing requires a lot of experts to work to together to give you clear title to your new home. Experienced title companies like Southern Title handle these details for you and even offer you title insurance for peace of mind that your home is yours forever.

Beware of choosing an inexperienced title transfer company, or one without deep roots in Louisiana. When it’s time to buy your home, choose the best title company you can plan early to secure your financing and be patient, trusting that your title experts are working on your behalf to make your home purchase a reality.

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Southern Title

Southern Title has 40 years of experience in closing real estate transactions in South Louisiana. Over that time; we have successfully closed more than 50,000 real estate transactions.

Why our customers trust us?
It is because we provide a safe, trustworthy environment where buyers and sellers can find impartial advice and technical expertise about title information, title insurance, and escrow services (both for the commercial and residential properties) in the Greater New Orleans Area.

If you need some help with closing a residential or commercial property in southeastern Louisiana, feel free to contact us. We are solution-focused, trustworthy, and providing our clients peace of mind.

The closing process doesn’t have to be hard anymore!

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