Tips for Navigating the Settlement Process

Before wrapping up the deal on a house, you gotta make it to the settlement table. You’re almost done selling your home, but hold off on that big sigh of relief just yet. While it’s true that you can finally let go of the stress of showing your home all the time, you still need to work together with the buyer, their agent, and stick to the promises in the contract.

As a seller, here’s what you need to know about the settlement process.

What hurdles do sellers face before closing on a house?

While the buyer takes on the responsibility of securing financing and obtaining homeowners insurance, there are certain contract contingencies that will also affect you as the seller, especially if you’re still living in the house.

Before finalizing the deal, most transactions involve a home inspection. This means you’ll have to make your home available for inspection and then negotiate with the buyers based on any findings, as per the terms of the contract.

In addition to the home inspection, some contracts and lenders may require termite and radon gas inspections. In such cases, you, your listing agent, or the buyer’s agent will need to coordinate the inspection of the property.

Another important step before closing is the appraisal. If the appraisal value is higher than the sales price, the buyers can feel satisfied knowing they’ve purchased a home below its market value. However, once the contract is signed, you cannot renegotiate for a higher price.

On the flip side, if the appraisal value comes in lower than the sales price, the buyer’s lender will limit the loan amount to that lower value. The buyer may need to contribute additional cash to cover the financing gap or request a renegotiation of the contract. Your agent can guide you on how to navigate this situation, but both parties are bound by the terms of the contract.

Before reaching the settlement, it’s important to review the contract with your agent and ensure that you are prepared to fulfill any obligations you’ve agreed upon. This includes conveying specific items to the buyer and addressing any repairs or improvements you committed to making.

Working out a settlement date through negotiation

When it comes to settling on a date, buyers and sellers usually engage in negotiations to find a mutually agreeable timeframe. If you’ve sold your home but aren’t quite ready to move into your new place, there’s a chance you can negotiate a “rent-back” arrangement with the buyer. This arrangement allows you to remain in the home after settlement by paying rent to the buyer.

Typically, lenders impose a maximum rent-back period of 60 days. If you require a longer period, it’s important to discuss it with your buyer and agent.

On the other hand, some sellers may permit the buyers to move in before the settlement takes place. Regardless of the arrangement, it’s crucial to have a written agreement in place that clearly outlines the responsibilities in case of any incidents involving the house or its contents during the transition period.

Settlement Services Simplified

The choice of who handles the settlement (also known as closing or escrow) services can vary depending on the market. In some places, the buyer gets to select the settlement company, while in others, it’s the seller’s call. When you’re closing the deal on a house, the buyer will provide the funds to purchase your home, and the settlement agent will carefully review the sales agreement to determine the payments you’ll receive. The transfer of property title to the buyers will take place, and the necessary arrangements will be made to officially record this transfer with the local records office.

During a typical closing, adjustments are made to calculate the final amounts owed by both the buyer and you as the seller. For instance, if you’ve been making property tax payments through an escrow account, you might receive extra credit for prepaid taxes, or if the property taxes haven’t been properly paid, you might receive a reduced amount at settlement.

Once all the settlement papers are signed, and the house keys are handed over, you’re finally free to move on to your next home.

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.