Navigating Your Home Sale

A Title Attorney’s Guide to a Smooth Closing

Selling your home can be an exciting but complex process. As a title attorney, I often receive a flurry of questions from clients preparing for closing. Here’s a comprehensive guide to help you understand the key aspects and ensure a smooth transaction.

What Are My Responsibilities While Under Contract?

Once you’re under contract, maintaining your property is essential. Keep up with regular maintenance tasks, such as lawn care, cleaning, and minor repairs. Avoid making significant changes or improvements without consulting the buyer, as this could affect the sale. It’s also crucial to continue paying your mortgage, insurance, and utilities until the closing date to avoid any complications.

• Additional Considerations- If your home is part of a condo association or homeowner’s association, you should continue to pay the dues on time to avoid a late charge. Federal Title is required to order a “statement of account” that will show your association dues are in good standing and provide any charges due and payable at settlement.

When Should I Transfer Utilities?

Timing the transfer of utilities is key to a seamless move. Aim to schedule the transfer for the day of closing. Contact your utility providers a week or two before the closing date to inform them of your move and arrange for final meter readings. This ensures that the buyer can set up their accounts to start immediately after closing, avoiding any service interruptions. One helpful tip is to notify your utility companies that this transfer is pursuant to the sale of your property, and the utility should stop billing your account on the closing date without terminating the utility at the property.

How Will the Payoff of My Mortgage Happen?

During the closing process, Federal Title will request a payoff statement from your mortgage lender. Some mortgage lenders require a third-party authorization form that allows Federal Title to request a payoff on your behalf. If needed, Federal Title will provide the form to you. The mortgage payoff document details the exact amount required to satisfy your mortgage. On the day of closing, Federal Title will net the payoff from the proceeds and remit the payoff funds to your lender. This ensures that the mortgage is cleared, and the title is transferred to the new owner without any liens.

• Additional Considerations- What about my escrow account?
  • If you have a tax and insurance escrow with your payoff lender, the payoff lender will refund the balance of your escrow account once the payoff funds are received, and the account is closed.
  • It is wise to call your payoff lender to ensure they have an accurate mailing address for the refund of your escrow funds.

How Long Does It Take to Get the Proceeds from Closing?

We know you are probably eager to receive your proceeds. Typically, you can expect to get your funds on the closing date. There are a couple of caveats to that timeframe to consider- 1) If the buyer is signing late in the day, the proceeds may not hit your account before the banks close. In this case, the proceeds will arrive the following business day. If you are the owner of a home in Virginia, it is Virginia law that a title company cannot disburse funds until the deed is on record. Recording is typically accomplished within 24 hours after closing.

What Should I Do With Existing Warranties?

Warranties on appliances, systems, or structural components can be valuable to the new homeowner. Gather all warranty documents and receipts and organize them in a folder. During the closing process, you can provide this folder to the buyer or to the title attorney to give to the buyer. It’s a good practice to highlight any transferable warranties and explain any conditions or steps required to transfer them. This adds value to your home sale and helps ensure a smooth transition for the new owner.

When Should I Cancel my Homeowner’s Insurance?

Homeowner’s Insurance should not be canceled until the buyer has signed all documents and any buyer closing costs and loan funds are in Federal Title’s escrow account. The best practice is to submit a termination request to your insurance provider for the day after closing. Federal Title will notify you as soon as closing is complete.

What Happens After Closing?

Once the closing is complete, several things happen on our end to finalize the sale:

1. Disbursement of Funds: The title company disburses funds to pay off your mortgage, settle any other liens, and deliver your net proceeds.
2. Title Transfer: The title is officially transferred to the buyer, and the deed is recorded with the local government to document the new ownership.
3. Settlement Statement and Closing Documents: You’ll receive a final signed settlement statement detailing all the financial aspects of the transaction, including the sale price, closing costs, and net proceeds, along with a copy of your countersigned closing documents.

By understanding these steps and responsibilities, you can ensure a smooth and successful home sale. If you have any specific questions or concerns, your title attorney is always here to guide you through the process. Selling your home is a significant milestone, and with the right preparation and support, you can navigate it with confidence and ease.