November 04, 2019 at 2:58pm | Ron Ferrara
What happens during the closing process?

  • Appraisal
    If the buyer is borrowing money for the purchase, the mortgage lender will arrange for a professional appraisal. This is done so the lender can be confident that the amount of money it’s lending to the buyer is in line with the market value of the home in case the lender needs to repossess the house. The appraisal is based on the estimated value of the home’s individual features, as well as comparable homes that have sold recently nearby. If your home appraises below the sale price, lenders are unlikely to approve a loan to the buyer for that amount. If this happens, you will either have to ask the buyer to make up the difference, lower the sale price, or challenge the appraisal. Your agent or attorney can guide you through this process.

  • Title Search & Insurance
    Your attorney will order a title search, which is a review of public records to make sure you’re the legal owner of your property. If there are any claims or judgments against the property, the title search should uncover them. These issues must be resolved for the sale to move forward. Unlike homeowners insurance which helps protect against future events like a fire, title insurance helps protect against past events affecting your home. For example, if you later found out the home you purchased has a lien for unpaid bills, title insurance would typically have you covered. There are generally two types of title insurance in a home sale: a policy for the new owner and a policy for the lender. In New York, the buyer will pay for both the search and insurance.

  • Co-Op Board Approval
    If you are selling a CoOp, the buyers will need to be approved by the board. They will need to fill out a lengthy application and submit proof of finances for the board to review. There may be parts of the application that require your signature as well - your agent will let you know what needs to be signed. Once the application has been submitted, the board will need to review it and then schedule an interview with the buyers. Then they will decide if the buyers may proceed with the sale.

  • Final Walkthrough
    The final walk-through typically occurs the day before or the day of the closing. The buyer and their agent will walk through the property one last time to make sure everything is in order. They will check that all required repairs have been made, that the property is clean and damage-free, and that all of your possessions have been removed unless you’ve arranged for certain items to stay. If the buyer discovers anything problematic, you’ll need to address it or the closing might be delayed.

  • The Closing
    The closing  is when the transaction is officially completed. You will sign a lot of paperwork, including signing the deed to the property over to the buyer. Don’t be afraid to ask your attorney or escrow agent about any documents you don’t understand. You have the right to know what you’re signing. The closing will take place at the office of your escrow agent, title agent, or attorney. Once all paperwork has been signed and funds have been disbursed, the buyer is officially the new owner of the property.
What should you bring to the closing?
You don’t need to bring much to the closing: usually just a government-issued photo ID, the keys to the property, and any outstanding documents and paperwork your attorney or escrow agent instructs you to bring. These may include documents showing you’ve completed all repairs requested by the buyer.

How long does the closing process take?
The full closing process, from the initial offer acceptance to the closing date, takes an average of 2 months. In a traditional sale, the buyer’s lender will be originating and underwriting the loan. This is a time-consuming process the lender undertakes to determine if the buyer qualifies for the loan. The underwriting process is one of the major things that can delay a closing. The National Association of Realtors reports that nearly one-third of all closings are delayed, so be prepared for that possibility. Common issues that delay closing beyond buyer financing issues include title issues, home inspection issues, and home appraisal issues.

What are the seller’s responsibilities during closing?
Both parties have obligations to fulfill under the sales contract. During the closing process, you’ll typically be required to:
  • Remove all your possessions from the property, unless they’re specified to stay under the contract. Major appliances, for instance, are sometimes negotiated into a deal.

  • Make any repairs you have agreed to make.

  • Clean the home right before the closing date. A good rule of thumb is to leave it as clean as you’d like to find it if you were the buyer. (Typically required unless the home is sold in as-is condition.)
These items aren’t typically required but they’re either a good idea to consider or a nice gesture for the new owner:
  • Notify subscription services, creditors and acquaintances of your new address and set up mail forwarding.

  • Collect any manuals and warranties you have for items in the home, such as the HVAC system and any appliances you’re leaving behind. Leave them on the kitchen counter for the buyer, along with any spare keys and garage door openers.

  • Shut off water valves to prevent any leaks between the time the buyer takes possession and the time they actually move in.
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