Once you’ve accepted an offer on your home and all your inspections have been completed, the next step; barring any repairs you may have agreed to in your sales contract; is to set a firm closing date and finish the sale of your home.
The closing is a meeting between you, your buyer and the settlement company where you will relinquish ownership of your for sale by owner property, turn it over to the buyer and once and for all collect your money. This may be the most critical step. Many a real estate deal has fallen through due to an unexpected surprise at the closing.
If a closing goes smoothly you will basically sit around for about an hour while your settlement company explains all the wording in your documents and you will sign paperwork until you can’t write anymore. My once legible signature is now been reduced to a squiggly line due to so many settlements.
If a settlement goes badly it can go on for hours while frantic phone calls are made to acquire missing documents or information. Here are seven tips to help you be prepared for your closing’
- When buying a house or selling your house, you should always schedule a walkthrough. A walkthrough is basically the buyer and seller looking at the property together and agreeing, “Yes, the house is in the same basic condition as when we signed the sale contract.” Schedule your walkthrough as close to closing as you can.
- Call the gas and electric company one week before closing and have the buyer do the same to transfer these services on the closing date.
- Make sure you leave any appliance manuals or warranties at the house. If you had put together a sales scrapbook, you might want to leave that also (less any photos you care about). I always leave leftover paint or paint chip samples, so the buyers can easily do touch ups as needed. Walls always get dinged from you moving out and them moving in. They really appreciate this.
- All parties listed on the title of your house needs to be present for the closing. If this is not feasible, contact the title company in advance to make other arrangements
- The title company is required to get a copy of the HUD-1 Settlement Statement to you 24 hours before closing so you can review it. You might have to remind them. Most people don’t care if they get it ahead of closing because they don’t have a clue what it means anyway! Take a little time to understand the HUD-1. This will make closing less stressful and could save you money. You need to be aware of what fees are legitimate and what are “junk fees”.
- Go out of your way to make the transfer as easy and pleasant for the buyers as you can. Being helpful, professional, and considerate when selling your home goes a long way in smoothing out any rough spots. It’s also your best insurance against the worst case – a lawsuit. Very unlikely to happen, but being on your buyer’s good side will certainly reduce the chances.
- Since your home is empty, be sure to get rid of any signs, brochure boxes, lockboxes, and anything else in the house you don’t want to leave. Always leave the house in clean condition, ready to move in to.
Be prepared for a lengthy explanation to the buyers about what they are agreeing to especially with their mortgage. Be courteous while this is being done.
Remember to locate and bring all of your keys and any pertinent information the buyer may want to know. Take some time and evaluate what questions the buyer might have once the move in and try to provide those answers ahead of time. How does the furnace work, how often should you feed the pond fish, etc.
Last, but not least, after closing immediately find a safe place for the closing documents as you will need them for your annual income tax return and may need to prove the house was sold later. And get that settlement check to the bank right way before you have time to lose it. I also recommend waiting at least a month before spending any of that money so you don’t waste it foolishly on any impulse purchases.
Congratulations! You’ve just finished your for sale by owner experience.