Settlement Tips for Sellers
Once you have a signed contract with a buyer for your home, there are still a few steps to take before you can breathe a sigh of relief. Here is what needs to happen to get you to the settlement table.
While the buyer is working to finalize their financing and obtain homeowner’s insurance, there may be some contract contingencies that require your effort. Once a contract is signed, the buyer will want to have your home thoroughly inspected to insure their investment. This means making your home available to inspectors and then working with your agent to negotiate repairs that turn up during the inspection period.
Most buyers will also be getting an appraisal on the home, which is normally a requirement by their lender. If the appraisal comes in lower than the sales price, the buyer’s lender will limit the loan to the appraised value. This means that the buyer will need to come up with additional cash or may ask you to renegotiate the contract. As your agents, it is our job to walk you through this situation and help you to determine the best solution.
Depending on the sales contract, there may be other repairs or improvements that you promised to make before getting to closing.
The settlement date is decided during the contract negotiations. If for some reason you would like to stay in your home past the settlement date, you can sometimes negotiate a “rent-back” with the buyer where you pay rent to stay in the home after settlement for a limited period of time.
A rent-back situation may also occur on the other side, where you allow the buyers to move into the home before settlement. In either scenario, you will need to have a written agreement that includes who will be responsible if something happens to the house or its contents during these rented periods.
In our market, the buyer normally selects the settlement or closing attorney. At the closing, the buyer will supply the funds for the purchase and the settlement agent, normally the attorney or paralegal, reviews the sales agreement to determine what payments you will receive. This may include payments for equity on the home, or credits for prepaid property taxes. This is also when the title to the property is transferred to the buyers and arrangements are made to record the title transfer with the Registrar of Deeds.
Once the settlement papers are signed, the house keys are transferred and the transaction has been recorded, you can breath that sigh of relief and move onto your next home.