Closing on a House: Settlement Tips for Home Sellers
Closing on a House: Settlement Tips for Home Sellers
Right before you seal the deal on your dream house, there’s one last step: the settlement table. You’re almost done with the whole process of selling your home, but hold off on that sigh of relief just yet. Sure, you can finally let go of the stress of showing your home around the clock, but you still need to play nice with the buyer, their agent, and stick to the commitments laid out in the contract.
So, as a seller, here’s the lowdown on what you need to know about the settlement process.
What contingencies impact sellers before closing on a house
When it comes to finalizing the purchase of a house, the buyer carries the responsibility of securing financing and obtaining homeowners insurance. However, there are a few contract contingencies that may also affect you, especially if you’re still living in the house.
Before closing the deal, most transactions involve a home inspection. This means you’ll need to make your home available for inspection and then negotiate with the buyers based on the inspection findings, as specified in the contract terms.
Apart from the home inspection, some contracts (and certain lenders) may require a termite inspection and a radon gas inspection. In such cases, either you, your listing agent, or the buyer’s agent will need to arrange for the inspections to take place.
Another crucial step before closing is the appraisal. If the appraisal comes in higher than the sales price, the buyers can feel satisfied knowing they’ve purchased the home below its market value. Once the contract is signed, you can’t renegotiate the price upwards.
However, if the appraisal comes in lower than the sales price, the buyer’s lender will limit the loan amount to the lower value. The buyer might need to provide additional funds to cover the financing gap or may request renegotiation of the contract. Your agent can guide you on the best course of action, but remember that both you and the buyer are bound by the terms of the contract.
Before heading to settlement, it’s essential to review the contract with your agent and ensure you’re prepared to fulfill any obligations you’ve agreed to regarding conveying items to the buyer and completing any promised repairs or improvements.
Negotiating a settlement date
When it comes to settling on a date for the transaction, buyers and sellers usually negotiate to find a mutually agreeable settlement date. If you’ve sold your home but aren’t quite ready to move into your new place, there’s a chance to negotiate a “rent-back” arrangement with the buyer. This means you can stay in the home after the settlement by paying rent to the buyer.
Typically, lenders place a maximum limit of 60 days for rent-back situations. If you require a longer period, it’s important to discuss it with your buyer and your agent.
Alternatively, some sellers may allow the buyers to move into the property before the settlement takes place. In either scenario, it’s crucial to have a written agreement that outlines the responsibilities in case anything happens to the house or its contents during the transition period.
The process of determining who handles settlement (also known as closing or escrow) services can vary from one market to another. In many areas, it’s the buyer who selects the settlement company, while in other places, the seller takes on this responsibility. During the closing on a house, the buyer provides the funds for purchasing your home, and the settlement agent carefully reviews the sales agreement to determine the payments you’ll receive. The title to the property is then transferred to the buyers, and necessary arrangements are made to record this transfer with the local records office.
During a typical closing, adjustments are made to ensure the final amounts owed by the buyer and yourself, the seller, are accurate. For instance, if you’ve been paying property taxes through an escrow account, you might receive additional credit for prepaid taxes, or if there were any issues with the tax payments, it could result in a reduced amount received at settlement.
Once all the settlement papers are signed, and the keys to the house are exchanged, you are free to move forward and embark on your next home adventure.
Experts in Residential Real Estate in Orlando
If you are BUYING or SELLING real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.
Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.
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Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.
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