Selling a home can be a bittersweet – and that makes finishing up the closing, the final step in the sales process, even more so!
Of course, it’s all going to be different, for different sellers. In many cases, finally winding down contract negotiations and heading for that closing table is cause for celebration, since it means that you’re finally (home-)free. Once you’ve closed, you’ll have officially sold your house, freeing you up to move on to bigger, better, and newer things. You may be able to parlay the proceeds from your sale forward as part of your payment for your next home. Or maybe you’ve already moved on, and getting rid of the property itself is the last thing you tying you to the past.
In other cases, sellers are going to be emotional about closing. After all, this was your home. Many people have a strong sentimental attachment to the property they’re selling – perhaps it was a family home that belonged to your parents, or a starter house that you and your partner purchased when you were young.
But whether reaching the closing date has you jumping for joy or reaching for a tissue, the fact of the matter is that it’s the home stretch – and it’s important to go in prepared. In a typical transaction, broadly speaking, most of the big negotiations, repairs, and inspections will already have been completed, making the closing event itself more of a formality, in many cases. With that said, there are still mishaps that can occur on the day of – and before and after the closing date, there’s a lot to take into account as a seller.
Here are a few crucial things to keep in mind as a seller, as closing nears:
What Does Closing Really Mean for Sellers?
In short, the closing is the moment when the buyer assumes possession of the property. They take the keys (and garage door openers, mailbox keys, security system codes, you name it), and officially become the owners of the home. At the same time, this is the moment when the balance of money changes hands, and the proceeds of the sale go toward paying off your mortgage lender, any lien holders, and yourself. As legal information site NOLO succinctly puts it:
“The closing is complete when the escrowee pays off your lender and other lien holders and service providers, pays your sale proceeds to you, places the deed (and the buyer’s mortgage if any) for recording with the county recorder of deeds, and gives all other transfer documents to the buyer.”
Completing Your Pre-Closing Checklist
Closing is a big day – but it’s really significant as the end product of a lot of other big days. As a seller, there are many important things you’ll need to get done before the closing can take place, including:
- Making all necessary repairs and modifications to the home
- Having the home cleaned and prepared for the buyer’s final walkthrough
- Collecting and preparing all important documents (including executed disclosures, purchase contract, closing statement, documents from your lender, receipts from renovation and maintenance, warranties/information on home systems, and more)
- Closing relevant accounts (i.e., cancel or transfer utilities and insurance policies)
- Going through all of the steps necessary to move to your new home
Will You Attend the Closing Event?
Broadly speaking, the closing date is agreed-upon by buyers and sellers, with the important event taking place at an escrowee’s office, which often means the office of the title insurance company overseeing the transfer and insurance of title. In plenty of other cases, the closing will occur at the offices of the buyer’s or seller’s attorney, or at an agreed-upon “neutral” setting.
Before the closing, it’s important to talk with your team and decide if you want to attend the event. It’s quite common for sellers to not attend the closing, whether for personal or practical reasons. Having fewer “cooks in the kitchen” can make the process go more smoothly – and, as Realtor.com points out, for sellers, closing often means that “the sellers sign eight documents and will have to sit through an hour and a half of watching the buyer sign.”
In lieu of being there at closing, many sellers choose to pre-sign transfer documents, including the deed, and then trust their attorneys to act as their representative at the closing. In many cases, this means granting your lawyer limited power of attorney to sign certain incidental documents on your behalf.
Moving On After Closing
As we’ve noted, one of the most important aspects of closing is the financial side of it. During closing, the appropriate parties will begin the collection and disbursement of funds. In many cases, moneys will be transferred directly into your account, or to your lender/any lien holders. In some cases, the funds may be wired directly to escrow on a new property, if you are making the purchase of your next home contingent on the sale of your current one.
After closing, your lender will also be responsible for preparing and sending a mortgage release to you, as well as to the local recorder. Down the line, there may be a few remaining financial details to iron out if they haven’t already been sorted, including the proration of property taxes at assessment time.
Once closing is done, the property will officially have been transferred to the buyer. In most cases, this means that you will no longer be allowed to occupy the property, and you must completely relinquish possession of the home. In certain circumstances, buyers and sellers may come to an alternative arrangement. For instance, a “rent back agreement” allows the sellers to remain in the property as tenants, for a specified period of time, in order to ease the transition, or to allow time to move or close on their next home. There are certainly other, different ways for sellers to remain in the home, post-closing.
Talking With a Local Real Estate Expert
Whether you’re a buyer or seller, an attorney is a critical partner to have on your side, one who can assist with the mountains of paperwork and countless negotiations that are part and parcel of real estate transactions, from contract to closing and beyond. The right attorney will bring a working knowledge of local law, taxes, and more, helping ensure that you get the fairest deal possible.
At the Gunderson Law Firm, we are committed to helping out clients make sure that the “t’s” are crossed and the “i’s” are dotted, in order to make the real estate process go as smoothly and fairly as possible. With years of experience and connections throughout Chicago’s real estate, insurance, title, and financial industries, our attorneys and staff specialize in helping individuals and businesses throughout Illinois with real estate transactions insightfully, promptly, and professionally. Drop us a line with any questions, or to set up your free initial consultation!