The reason homes are considered investments is the potential to sell them and turn a profit. Since property values tend to appreciate, and each mortgage payment increases equity, you can earn money when you sell your house if you have owned it for a substantial amount of time.
Selling a house can be a stressful experience, especially if it is your first time. However, once you navigate the sale and are ready to close, you can benefit financially after years of putting money into the property.
Here is a closing checklist to help you complete the transaction with peace of mind.
Pre-Closing Preparations
Before you accept an offer, you must consider pre-closing preparations. Here are a few steps you will take before finalizing the home sale.
Review the Purchase Agreement
Every home purchase includes a contract that both the seller and the buyer must sign. This document contains many terms and conditions that both parties should understand, such as the final price of the deal, any conditions regarding the closing disclosure, and the legal declarations regarding the transfer of ownership.
Final Walk-Through
Before going to the closing table, a final walk-through of the home and purchase agreement ensures all sale conditions are met. This verification may include addressing final repairs and assessing the property’s condition before the transfer.
Gather Necessary Documents
Numerous legal documents are involved in the purchase of a home. You must bring these closing documents with you to the final signing to ensure a smooth transition. Sellers should bring personal identifying information (driver’s license), proof of ownership, mortgage payoff information, and any additional documents your lawyer recommends.
Confirm Closing Date, Time, and Location
Missing a closing date can set back the sale of your home by weeks or even months. It is essential to confirm this appointment with all parties, including the closing agent, the title company, the buyer, and your lawyer.
Typical Seller Closing Costs
Just as buying a home costs money upfront, selling a home comes with numerous closing costs. These expenses must be paid when the real estate transaction is completed to finalize the deal.
Sellers are typically responsible for real estate agent commissions, transfer taxes, title insurance, paperwork fees, homeowners insurance, and real estate attorney fees.
Prorated Property Taxes and HOA Fees
Depending on when the home is purchased, both the buyer and seller may pay for portions of property taxes and homeowners association fees. Prorated taxes and HOA dues ensure that neither the buyer nor seller are responsible for costs that are owed when they do not own the home.
For example, if you purchase your house in May and property tax payments for the year are charged in January, you should only have to pay those taxes after May.
Credits and Adjustments
Credits are adjustments to your closing costs that other parties cover. Usually, these expenses are taken on by the buyer or seller to facilitate a smoother transaction. Some common seller credits include homeowners insurance, home inspection costs, repair costs, mortgage loan credits, HOA fees, or other buyer closing expenses.
Funding and Payment
No closing checklist is complete without a mention of payment considerations. A lot of money gets moved around in a real estate sale, so it is essential to understand the funding and payment implications of selling your house. Here are a few things to keep in mind as you get ready to sign all the paperwork involved in the sale.
Mortgage Payoff
If you have a remaining balance on your mortgage, you must pay it to your lender. The title company will receive funding from the buyer, which may come from the loan itself, and use those funds to pay your lender directly to cover the remaining balance.
Any remaining interest before the closing day will be prorated, and the rest will be eliminated when the mortgage is paid off.
Net Proceeds
The net proceeds represent your final profit from the home sale. Before you receive this money, the remaining balance of your loan and all selling costs will be deducted. Whatever payment is left goes directly to you, which can help fund your down payment and projected monthly payments on a new home.
Payment Disbursement
Net proceeds are typically sent to the seller via wire transfer to their bank account or a check unless the transaction is completed in cash.
Post-Closing Tasks
The post-closing phase begins once all the documents have been signed. However, there are still some tasks to complete before the transfer of property ownership can be finalized. Here are some post-closing activities that you will need to do to cut ties with the property completely.
Transfer Utilities
While you owned the home, you were responsible for all utility expenses, such as gas, electricity, water, and others. To avoid additional charges, you must transfer these utilities out of your name and to the buyer. Otherwise, you will end up paying for services that the buyer is benefitting from.
Fortunately, many of these transfers can be made electronically or by phone, so they are relatively simple.
Forwarding Address
Now that the home’s address belongs to someone else, you need to ensure all your mail goes to the right place. Provide a forwarding address to the buyer, the post office, and other relevant parties to ensure you don’t miss any important mailings due to your move.
It is very common for new homeowners to receive mail from the previous owner for several months after the transaction.
Cancel Homeowner’s Insurance
Homeowners’ insurance policies are designed for specific properties. Once you move out of the house, your policy is irrelevant. You can avoid paying unnecessary insurance premiums by contacting your insurance carrier and canceling the policy on that home once the sale is finalized.
Keep Records
Maintaining detailed documentation is one of the most important elements of a comprehensive checklist. After the closing process is completed, you should still keep a record of the sale and closing disclosure for future reference. You never know if some disputes over property ownership or payments may arise in the following months or years.
Benefits of Working with a Cash Home Buyer
If you want a simplified closing and a fast transaction, consider selling to a cash home buyer. These companies will take a property off your hand in any condition, making it easier to sell a distressed property, troublesome rental, inherited home, or otherwise unwanted house. Here are some advantages of working with cash home buyers.
Simplified Closing Process
The closing checklist is far less complicated when you sell to a cash-for-homes company. First, there is no financing needed to purchase the home, so the whole process moves much faster. Second, you don’t have to work with a real estate agent to sell the house, so there are fewer parties involved.
Reduced Closing Costs
Closing costs are much cheaper when working with a cash buyer. The elimination of a loan estimate, inspection costs, and other fees ensures the seller won’t have to pay as much money upfront to sell the house. The biggest savings come from the lack of realtor fees, which can cost 5-6% of the home’s sale price.
Flexibility and Convenience
Cash buyers allow for greater flexibility. Since they have funds available to purchase your home faster, you can choose a closing date that matches your schedule. Whether you are trying to avoid foreclosure, moving for a new job in less than a month, offloading an inherited house, or dealing with a divorce settlement, cash buyers can work around a more challenging timeline.
These sales are also more convenient as you do not have to make repairs or clean the property before selling. Most cash buyers take homes in any condition, even if you want to leave possessions behind.
Contact A-List Properties for a Fast Closing Process
A-List Properties is a cash home-buying company specializing in hassle-free transactions and fair cash offers. Once you accept our no-obligation offer, we can close the deal in 14 days or less, making it easier to set a closing day that works for you.
To request a quote for your home, call us today at 972-526-7042 or complete the online form. The A-List Properties team will contact you promptly to discuss your property.
Zach Shelley
Zach Shelley is a seasoned real estate investor with a diverse network spanning across the nation. As the founder of his own real estate venture, Zach is committed to offering innovative solutions to homeowners facing various real estate challenges.. Through his dedication and strategic approach, Zach continues to make a significant impact in the real estate industry, providing homeowners with alternative pathways to navigate their property transactions.
