What can I expect at the closing table?

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You are almost there!  Most of the hard part is behind you now.  Once the buyer has completed  inspections and you have worked out and completed all the requested repairs, you are headed into the home stretch.  At this point, you are waiting on confirmation that the buyers financing is complete, the final loan package has been sent to the closing attorney and you have been given a clear to close.  You should receive a copy of the preliminary HUD-1 for review at least a day before closing.  Don’t be surprised, however, if you don’t see one until you are sitting at the closing table.

HUD-1:

This document is what you will sign at closing that will have all the numbers associated with the transaction in one place.  You should get this document just before the closing from your Realtor and you should go over every line carefully to make sure all information is correct and that you understand what each line represents.  Your attorney will go over this in detail at the closing, but it is a good idea to head off any problems in advance so that you don’t have changes at the closing table.  If you have to make changes on the day of closing, it could delay the recording of the deed and your ability to get your funds.

Here is what you want to look for:

  • Make sure your name and the property address is correct.
  • Review the seller side to make sure the Purchase price is correct.  The seller side is the right side of the document.  It is a good idea to start on page 2 where the breakdown of all the seller paid closing costs are listed.  You will see the commission paid to the Real Estate Firm, any attorney fees, recording costs and doc stamp fees.  In NC, the seller must pay $2.00 per $1000 of the purchase price.
  • Review any additional costs such as a survey, contractor costs for repairs not paid, inspections done by the seller or anything else the seller needs to pay out of the proceeds.
  • Back on page one, make sure the purchase price is correct. Review any adjustments made for pro-rated taxes and HOA fees.    Seller fees from page 2 will also show up here to be deducted.  This page will show what the proceeds from the sale will be or if you need to come to the table with any funds.  There will be a few other sheets attached that will give more detail on where the numbers come from.

At closing, you will sign 5-6 copies for all parties.  This form needs to be correct and the lender for the buyer needs to approve it before funds can be released and the deed can be recorded.

DAY OF CLOSE:

All parties to the transaction must be present to sign unless other arrangements have already been made.  If you are unable to be at the closing, you will need to make arrangements to have the documents sent to you in advance so that you can sign and have notarized and get back to the attorney in time for the close.  You can also arrange to have a power of attorney  to allow someone else to sign for you.  In many states, even if the spouse is not on the deed, they will still need to sign to sell the home.  Please check with the closing attorney if you are unsure.  You will need to bring your ID and any funds (if necessary).

The attorney will normally sit down with all parties, get everyone’s ID’s and then review the HUD-1 Settlement Statement with everyone. If everything is correct, all parties will sign several copies and an original will be given to the seller, the buyer, the attorney and the agents.  There will be a few more documents you will need to sign along with the deed and then you are done!  You will not need to stay while the buyer signs their documents.

Please bring along any keys, remote controls and anything else the buyer will need for the home.  You may want to go over a few things with the new buyers before you leave such as alarm codes, important numbers or anything else that would be helpful.  This can be a very emotional time for many sellers and they want to be sure they have covered everything and know that their home is in good hands.

AFTER THE CLOSE:

After the buyers has signed all the loan documents, the attorney will fax or email the lender the final signed package for review.  They will then authorize the deed to be recorded and funds to be disbursed.  Normally, any funds you are expecting can be picked up the same day if the closing is done early enough.  In some cases, the recording of the deed can be delayed along with your funds The attorney will hold the keys until the deed has been recorded. Have patience and all things will get worked out in a timely manner.

That’s it!  You are done and on to your next home.

 

 

Other titles in the seller series:

Article #1: Seller Questions Answered – A preview to Listing your home for Sale
Article #2: What do I need to do to prepare my home for sale?
Article #3: Why do I need an Real Estate agent and how do I select one?
Article #4: I have signed the paperwork, now what? -What to expect during the listing period
Article #5: A buyer wants to see my home -How can I maximize showing opportunities?
Article #6: I have received an offer – now what?
Article #7: My home is under contract – What are the next steps?
Article #8: What can I do to prepare for my move?
Article #9: What can I expect at the closing table?
Article #10:  What happens after my home is SOLD?

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Home Style Title card

Sonya Leonard –Keller Williams Realty – Mooresville NC.  The Home Style Team provides free access to individualized home searches for all homes in Statesville, Mooresville, Troutman, Lake Norman and the entire Lake Norman Area.  Explore buyer and seller reports, community resources, new home communities, and be sure to sign up for instant alerts to help find your dream home.  Let Sonya help you INVEST in Real Estate and your Future! (704) 450-0588.

My home is under contract – What are my next steps?

You have made it through the negotiations and accepted an offer on your home.  Now, your Realtor® is going to really get to work!  This part of the home sales process is one of the toughest.  There are many things during this critical period that can go the wrong direction without careful attention (and a little bit of crossed fingers).

Inspections:j0433856

Usually within the first week, the buyers agent will schedule inspections requested by the buyer.  You can usually expect the buyer to have a home inspection and pest inspection but you may also see a septic inspection, well inspection/water test, radon test and a survey. Let’s take a closer look at what you can  expect with each one:

  • Home Inspection: A licensed home inspector selected by the buyer will come to your home and spend between 2 to 4 hours checking out your home for problems.  They will be looking at just about everything and especially focusing on safety items.  The big items are the roof, electrical, plumbing, the heating/AC system, structure, insulation, windows/doors and siding.  They will check for any red flags like water intrusion, mold, rot and damage.  They will also check to make sure appliances are operational, plumbing fixtures work properly, windows and doors open and close, light fixtures work and fireplaces function.  Most inspectors are not concerned with small cosmetic issues.  They are there to make sure the home is safe and items are functioning as intended.
  • Pest inspection:  A licensed termite inspector will come out and carefully inspect the perimeter of the home, the basement/crawlspace, garage and interior, paying close attention to wood that may be in contact with the ground.  They are especially focusing on damaged wood caused by termite tunnels.
  • Septic Inspections: For homes that have their own septic system, it is highly recommended that a buyer have a septic inspection to make sure the system is operating properly.  The tank and leach field will be checked along with any alarms and pumps.
  • Well inspection/water test:  If the buyer is obtaining a government loan, a water test may be required by the lender.  The buyer will also want to ensure the pump is working properly and the water is safe to drink.  A small sample will be taken and sent to a lab for testing with results in 2-4 days.
  • Radon test:  Radon is a gas that comes up from the ground and can be trapped in your home that can cause many health problems.  Radon testing has become more popular in recent years and many areas are prone to radon.  It is often seen in homes with basements and many buyers will spend the extra money to have this testing done.  Radon can be mitigated but can be costly in some cases.
  • Survey:  Some buyers may want a survey done to identify the boundaries of the property and to ensure there are no encroachments.  They will research records for any right of ways or easements and verify acreage.

 

clipped images,cropped images,cropped pictures,icons,magnification,magnifying,magnifying glasses,PNG,searches,searching,transparent backgroundAfter all inspections have been completed, the buyers will go through all the reports and may come back to you to ask for items to be repaired or replaced.  This is all done during the Due Diligence period in North Carolina.  The buyer can ask for repairs, replacements or re-negotiate the contract and the seller will have a decision to make.  You can agree to some or all of the repairs or choose not to make any repairs.  These requests and negotiations can become very heated and emotional and many contracts have fallen apart at this point.  As a seller, one way you can make the inspections less stressful is to have inspections done before you list your home and be aware of any items that need to be repaired and then either fix them or let the buyer know upfront the asking price reflects known repairs that are needed.  If termites are found or past damage, you may have no choice but to treat your home as the buyers lender may not finance the home without it.  If your water test comes back with unacceptable results, you many need to treat your well and have a new test done and if Radon gas is found in high levels, you will probably be asked to have it mitigated by a professional.

Financing:

During this time, the buyer will be working with their lender to move the loan forward.  An appraiser will contact you to schedule a time to come out and appraise your home for the buyers lender.  Make sure you have looks it’s best  to showcase it’s features for the appraiser.  If the appraisal comes back too low, you will have another decision to make.  The buyer will most likely want to renegotiate the price of the home to match the market.

Due Diligence Date:

In NC, the buyer has up to this date to do all their “due Diligence” for the home. They must ensure their inspections are done, all paperwork has been reviewed, financing is on track and they still want to purchase the property.  The can ask for an extension of the Due Diligence date but the seller is not required to give an extension.  This date is critical as the buyer is saying “I am buying this house for sure” after this date.

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You have most likely been packing your home for the big move, but now the date is getting real close and you need to ensure you will have everything out before the final walk-thru and closing.  Be sure the home is cleaned out and cleaned up to avoid any delays.  The buyer will come out the day before or before closing to ensure the home is still in the same or better condition as it was when they first saw it.

Closing:

The buyer will have selected a closing attorney (North Carolina is an attorney state) to perform the closing.  You will normally have a settlement statement a couple days in advance of the close to review all the numbers and make sure everything is correct.  This will help avoid any last minute delays or problems but don’t be surprised if you don’t see one until you are sitting at the closing table.  On the close date, attend the closing, bring your id’s, keys, remotes and anything else the buyer may need.  You will go over the settlement statement again and sign the seller documents and then will most likely be asked to leave.  You do not need to stay while the buyer signs their loan documents.  The attorney will give the keys to the buyer when the deed is recorded.  Any funds you may be expecting will be disbursed after recording also.

 

My Best Tip: Be patient, be flexible and expect repair requests or delays.  In almost every transaction these days, there is almost always something that comes up that will try your patience but your agent will help you through the rough spots and get you to the end.

 

Other titles in the seller series:

Article #1: Seller Questions Answered – A preview to Listing your home for Sale
Article #2: What do I need to do to prepare my home for sale?
Article #3: Why do I need an Real Estate agent and how do I select one?
Article #4: I have signed the paperwork, now what? -What to expect during the listing period
Article #5: A buyer wants to see my home -How can I maximize showing opportunities?
Article #6: I have received an offer – now what?
Article #7: My home is under contract – What are the next steps?
Article #8: What can I do to prepare for my move?
Article #9: What can I expect at the closing table?
Article #10:  What happens after my home is SOLD?

 

 

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Home Style Title card

Sonya Leonard –Keller Williams Realty – Mooresville NC.  The Home Style Team provides free access to individualized home searches for all homes in Statesville, Mooresville, Troutman, Lake Norman and the entire Lake Norman Area.  Explore buyer and seller reports, community resources, new home communities, and be sure to sign up for instant alerts to help find your dream home.  Let Sonya help you INVEST in Real Estate and your Future! (704) 450-0588.

I have received an offer on my house – Now What?

j0305899 Your Realtor has just informed you that he/she has received an offer on your property! Now what?!

I know your head is full of questions that you want ask your agent but it is best to just sit down with your agent and go through the entire offer. Your agent may send you a copy and go over on the phone with you, either way – be sure you cover all the details and understand exactly what the buyer is offering. There are several things you should pay close attention to on the offer:  The purchase price, the due diligence date and fee, the closing date, the earnest money, requested closing costs, type of financing the buyer is getting, fixtures and personal property, warranty requests and any additional addendums.

Offer Price:

Of course, the price is the first item to check. Don’t be shocked when it is not what you expected right off the bat.  In many places it is still a buyers market and the buyers are doing their best to get the lowest price possible – even to the extent of coming in at an insulting low ball price.  Don’t be offended, at least the door is opened for negotiations.  Take a look at the entire contact with all terms before rejecting or send back a counter offer.  The best case scenario would be that you love the price and just accept the offer without any negotiation, but that rarely happens.  Be sure to check and see if the buyer is also requesting closing costs be paid on their behalf. You will need to consider this as part of the offer price.

Due Diligence:

In North Carolina, we have a fee that is paid directly to the seller that enable the buyer to have a set period of time to get all their “due diligence” done on the property that will include but is not limited to: Home inspections, surveys, septic inspections, review of covenants and bylaws, financing and water testing.  The fee paid for this period is negotiable between buyer and seller and will be credited to the buyer at closing.  The due diligence date is a critical date that allows the buyer to make the decision to move forward or terminate for any reason or no reason.  If the buyer terminates, the due diligence fee is forfeited. :

Earnest Money:

Earnest money is another “good faith” fee that is offered by the buyer to let the seller know they are serious about purchasing the home.  It is usually between 1-3% of the purchase price and is held in a trust fund by the listing agent or buyers agents broker.  This money will go to the seller if the buyer breaches the contract and will be credited to the buyer at close if all goes well.  If a dispute arises and the buyer terminates, you must request in writing that the seller release the EM.  If they refuse, the money is held in the trust fund until settled or sent to the clerk of court for resolution.

Closing Date:

The buyer should have specified a closing date on which the closing will take place on or before. This date is likely 4-5 weeks from the date of the offer. If the buyer is not using a mortgage and is offering “all cash”, the closing date could be 1-2 weeks away.

Fixtures and Personal Property:

Be sure to check as see if the buyer is asking for you to leave any fixtures you had excluded from the offer (like a Shed or light fixture you planned to keep). Also check to see if they are requesting any personal property such as a refrigerator, playset or anything that is not affixed.  These items should convey at no value.  If you decide you would like to sell some of your personal property, you would need to do this with a bill of sale and not include as part of the offer.  Lenders do not like to see personal items as part of the deal.

Home Warranty:

Check to see if the buyers is requesting a home warranty and if they are, who is paying for it?

Additional Addendums:

There may be other addendums that apply to the offer such as a contingency that the buyer may need to sell another house or the buyer may ask for deadline for the answer, or even ask for certain repairs be done in advance of inspections.  Check to make sure you have gone through ALL forms in detail.

Pre-Approval Letter:

Be sure that the buyer has included a pre-approval letter from a bank or proof of funds if paying cash along with the offer.  Do not even consider an offer until you know they are qualified to buy.  Pay close attention to the type of loan they are getting, this will help you see if they have put money down or if they need 100% financing.  Keep this in mind if they are requesting closing costs.

Make a decision:

After you have reviewed all the terms with your Realtor, it is time to make a decision.  You may decide to accept the offer as written, reject it outright or offer a counter to their terms.  In NC, we have a “response to buyers offer” form that is wonderful for going back to the buyer and suggesting more favorable terms. This form rejects the original offer but in a gentle way to encourage a new offer.  This also keeps you open for other offers to come in. It is best to try and keep the door open to negotiate a win-win situation rather than just reject outright.  Once you respond, give the buyer a couple of days to come back with another offer.

 

Other titles in the seller series:

Article #1: Seller Questions Answered – A preview to Listing your home for Sale
Article #2: What do I need to do to prepare my home for sale?
Article #3: Why do I need an Real Estate agent and how do I select one?
Article #4: I have signed the paperwork, now what? -What to expect during the listing period
Article #5: A buyer wants to see my home -How can I maximize showing opportunities?
Article #6: I have received an offer – now what?
Article #7: My home is under contract – What are the next steps?
Article #8: What can I do to prepare for my move?
Article #9: What can I expect at the closing table?
Article #10:  What happens after my home is SOLD?

 

 

**********************************************

Home Style Title card

Sonya Leonard –Keller Williams Realty – Mooresville NC.  The Home Style Team provides free access to individualized home searches for all homes in Statesville, Mooresville, Troutman, Lake Norman and the entire Lake Norman Area.  Explore buyer and seller reports, community resources, new home communities, and be sure to sign up for instant alerts to help find your dream home.  Let Sonya help you INVEST in Real Estate and your Future! (704) 450-0588.