If you’re thinking about selling your home, you’ve probably got more than a few questions. How long does it take? What am I responsible for? When will I get the money?
Because there’s a lot that goes into a home sale, we’ve rounded up the answers to some of the most common questions sellers ask, to prepare you for what to expect.
How long does it take to close a sale?
The “closing” period of a home begins when a seller accepts a buyer’s offer, and it ends when the last document is signed at the closing table.
According to Ellie Mae, the top cloud-based platform provider for the mortgage industry that processes 35 percent of mortgage applications, the average closing time on a home loan is 45 days.
Detroit area real estate agent Deborah Smith, who has 65 percent more property sales under her belt than the average agent, says it takes about 30-45 days.
The National Association of Realtors reports that a property stays on the market for 29 days on average.
And when you sit down to sign all the paperwork, it takes about an hour to an hour and half to John (or Jane) Hancock your way through it all.
The entire closing process generally includes:
- Opening escrow
- Reviewing and clearing the title
- A home inspection
- Making repairs
- An appraisal
- Renegotiating the offer
- Paying off hanging debt
- A final walkthrough
Any hiccup in the process can add onto the closing process, so it’s critical to have all the paperwork ready to go in advance. You’ll get a firmer closing timeline once you and the buyer sign a purchase and sale agreement.
What paperwork do we need to have ready?
Opening escrow occurs when the money for a home sale gets transferred to a third-party, known as an escrow officer, to keep everyone’s cash safe until the transaction closes. The escrow officer will order the title transfer and prepare closing statements as well.
Be sure to know whose name is on the home’s title.
Documents needed will vary, but you’ll most likely need to provide your escrow officer with:
- HOA information
- Mortgage statements
- Smoke detector certificates
- Property tax bills
When you open escrow, you’ll likely receive:
- An Escrow Holder Agreement
- State-specific forms
- Grant Deed
- 1099-S Input Form
- Property Information Statement
- Statement of Information
- Affidavit of Nonforeign Status
What do I need to do for the home appraisal?
The home appraisal will be scheduled after you and the buyer have come to an offer agreement and signed the purchase agreement. You won’t be responsible for the cost, but you will have to prep the home.
The appraiser’s job is to focus on the bones of your property. Although your personal items won’t be factored into the appraisal, you should still take the following steps to prepare:
- Clean up: Clean and declutter enough to allow the appraiser to see the details and access the entire space.
- Kill the odor: Air out the place and eliminate smells.
- Detail landscaping: Mow the lawn, and pull the weeds.
What about inspections?
Buyers can ask you to make repairs and also renegotiate after a home inspection, so it’s crucial that you pay attention to the potential problem areas.
Here are a few that are in particular:
- Make sure your wiring is functional, installed properly and up to code
- Water should properly drain around your house and not seep into the interior, foundation or basement
- The roof should be leak-proof and free of cracked tiles
- Check for foundation problems
- Look for peeling paint on the exterior
- Be on alert for other signs of disrepair such as cracked tiles and other cosmetic issues
- Watch out for mold
- Pay attention to leaky pipes
- Check your HVAC system
What do I do after inspections?
After the inspection process, you’ll want to prep for closing:
- Do one more good cleaning session, and pay attention to drawers and closets
- Turn off shut-off valves that could damage the home
- Leave extra keys and garage door openers where buyers can find them
- Forward your mail, and change your address
- Begin notifying creditors, subscriptions services and contacts of address change
- Gather all manuals, receipts and warranty info
What do I bring to the closing table?
About a month and a half after you’ve opened escrow, you’ll finally come to the magical closing day, where you’ll officially sign off. You’ll need to bring:
- A check (if you aren’t going to make money on the sale)
- A photo ID
- House keys
- Record of homeownership
- Most recently paid utility bills
- The deed to the house
- Mortgage information
- A list of home inspection repairs
- Property tax information
What will everyone else bring?
Your real estate agent, escrow officer and closing agent will provide:
- Your mortgage and loan payoff info
- Escrow account info
- HUD 1 Settlement Agreement
- Inspection Agreements
- Termite inspections and property tax information
What will it cost me?
A typical seller will pay the following at closing:
- The remaining mortgage balance (if applicable)
- Agent commissions (usually between 3 percent and 6 percent)
- Property taxes, utilities, HOA dues, homeowner’s insurance and any other related bills
- Title fees
- Escrow/attorney fees
This list is not exhaustive. You may have other paperwork or fees to take care of.
Pro tip: Hold off on canceling your homeowner’s insurance or utilities until after closing. You don’t want to leave the home without heat, AC or proper insurance.
What do I do after closing?
It’s time to finish up. Make sure all utilities are transferred out of your name and into the new owner’s, and cancel your homeowner’s insurance policy once the title is officially transferred.
File your closing paperwork in a safe place so you have access in case you need it.
When do I get paid?
This is the several hundred thousand dollar question (in many cases). Sellers typically get paid on closing day.
It’s ideal to close on a Monday, Tuesday, Wednesday or Thursday during local banking hours for the quickest payment. Friday closes delay payment until Monday.
Paper checks are the quickest way to get paid as a wire transfer requires an extra 24 hours. The check should reflect your net proceeds — the total amount you take away from selling the home after the accounting for your mortgage payoff, fees and taxes.
You’ll receive your money from the escrow or title company involved.
**This article was provided by: Sarah Stilo, Content Marketing Coordinator, HomeLight**
**Information noted in this article may or may not reflect the views of National Title Company**