What Is the House Closing Process for a Seller?
The closing process requires the seller to take on several responsibilities and costs. Here’s what you need to know, and how you can avoid the hassle.
After you’ve prepared your house for sale, you might already be tired of the home selling process. After all, it wasn’t easy to remove your family’s personal belongings, replace outdated wallpaper, make necessary repairs, or host open houses. Once you have an interested buyer, however, you’ll enter into the closing process, which comes with its own set of procedures and costs.
Closing is the process by which you transfer ownership of your home to a new buyer. It culminates when the escrow company collects the documents and money needed to close the sale on the closing date. Before then, though, there’s typically a lot of negotiation between the seller and the buyer. If you want to avoid this process altogether, you can choose to sell your home off-market with Sundae. Sellers who go this route enjoy faster closing times, reduced costs, and less hassle.
Steps to closing as a seller
- Sign the purchase offer. This initiates the closing process and dictates the timeline for inspections and appraisals, the purchase price and how it will be paid, which major appliances stay with the property, and any other rules about how the sale will proceed.
- Open an escrow account and hire an attorney. The buyer will deposit their earnest money, a gesture of good faith, into an escrow account. The escrowee will protect the money until negotiations are complete. At this point, you may also want to hire an attorney. Some states require an attorney to represent the lender, but you may want someone to represent your interests as well.
- Title search and insurance. A title search checks for loans, liens, and claims on your property. Title insurance protects the buyer and the lender from issues that come up surrounding the title. This could be either during the search or down the road. For example, there might be outstanding taxes or fees due, disagreements over the boundaries of your property, or hidden heirs to your property. Though these issues may seem unlikely, about one quarter of title searches reveal some sort of problem, according to the American Land Title Association.
- Complete necessary inspections. Most lenders will require a home inspection. Even if the buyer isn’t using financing, they’ll likely still want to have the property inspected. General inspections look for electrical and plumbing issues and signs of damage. The buyer may also want to get a pest inspection, a mold inspection, or other types of specialty inspections for peace of mind.
- Renegotiate. After the inspection, the buyer may want you to resolve issues that were revealed, lower the selling price, or both. If you want to avoid these negotiations when it comes time to sell your home, consider selling your home with Sundae. An inspection from Sundae leads to multiple cash offers from investors with no hidden fees, plus the potential for a cash advance of up to $10,000 if you need it. We’ll never ask you to pay for repairs yourself.
- Get a professional appraisal. One of the final steps is to have a professional appraiser assess the fair market value of your home. Most of the time, the appraisal will come in at or above the selling price. Fannie Mae estimates that only about 5% of home appraisals are less than the contract value. But if your appraisal comes in low, the buyer may want you to lower the selling price.
- Finalize the sale. On closing day, you’ll need to sign some paperwork to finalize the sale, but you don’t necessarily need to attend the buyer’s closing. You’ll also need to clean your property, remove all possessions not included in the sale, and hand over the keys.
Read More: Checklist for Selling a House
How much does closing cost for sellers?
If you’re wondering who’s responsible for closing costs, the answer is that the buyer and the seller often share these costs. But the bulk of the burden typically falls on the buyer. However, sellers pay costly real estate commission fees for both the selling and listing agent, which typically run about 6% of the home’s value. In addition, sellers are often responsible for:
- Transfer tax
- Half of all escrow fees
- HOA fees and property taxes
- Attorney fees
- Title insurance
If you’re selling your home because you need money, the cost of selling might be concerning to you. Not only do you have to worry about closing costs, but you’ll also pay for repairs requested by the buyer and other fees associated with getting your home ready for sale. If you want to avoid all these costs and be handed a check instead, consider requesting an offer from Sundae. The price we offer is the price you’ll get; there are no hidden fees or closing costs to worry about.
How long does closing take?
In August, the average time to close a purchase was 45 days, according to a report from Ellie Mae. It can take longer than that to close if there are issues that arise with the inspection and renegotiation between the buyer and the seller. And keep in mind, that doesn’t include the time your house will sit on the market. It could take time to find an interested buyer, especially if your house lacks curb appeal or is in an undesirable area.
Related: How Long Does It Take to Sell a House?
When selling your house off market, on the other hand, you can close in as little as two weeks. It can be difficult to find an off-market buyer who won’t charge high fees or provide you with a low offer. But when you sell with Sundae, we help you get the highest price for your house without any hidden fees, so you can sell your house fast without the headache.
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