At Bayer & Black, P.C., we have represented thousands of sellers of real estate. Much of the stress of a real estate transaction comes from being uncertain as to what needs to be done and when. To that end, what follows is a listing of the major steps you can expect from now until closing. This is not meant to be entirely comprehensive and there may be more, or less, to do in your particular circumstance, but it should serve as a reliable guide going forward.
- Once the material terms (price, closing date, contingencies) are negotiated and agreed upon (and, in some circumstances memorialized in a “binder”), the buyer will arrange for a building inspection. Once building inspections are complete, there are typically further negotiations related to the building inspection. These negotiations will often result in you making repairs or giving a buyer a credit against the purchase price.
- After the inspection items are negotiated, a formal contract of sale will be executed, first by the buyer, and then by you, as seller. The buyer will pay the remaining deposit at the time the contract is delivered for your signature. The deposit is held in escrow by your attorney until closing. Contracts are often prepared and delivered to buyer’s attorney immediately so that preliminary negotiations on the contract can take place between attorneys while the inspections are being performed and negotiated. This keeps the process moving in a timely fashion.
- If the deal is contingent upon the buyer obtaining a mortgage, you should not undertake any significant obligations until the buyer’s mortgage contingency is released. Often, a buyer will not obtain a mortgage commitment by the date in the contract and will ask for an extension of the contingency. In that case, you would discuss with your attorney whether the extension should be granted. Until the contingency is lifted however, the buyer can terminate the contract without losing its deposit.
- Once you sign the contract, the buyer will order a title search and search of the various municipal departments (zoning, health, fire, etc.) The searches will be reviewed to ensure the seller can provide clean title and there are no municipal violations. If any items arise, which happens relatively infrequently, you will need to take action to correct the defects.
- After the financing contingency is lifted, you should make arrangements to be out of the property by the closing date.
- At or prior to closing, you will meet with your attorney to sign all the closing documentation.
- On the day of closing, the buyer will do a final walkthrough of the property to make sure everything is still working and there is no new damage. After the walkthrough, the actual closing will take place.
- Typically, at closing, your attorney will take in all the closing proceeds and write all necessary checks. The net proceeds will typically be transferred to you either one or two business days after the closing, depending on how early or late in the day the closing occurs.
You can appreciate this list is “big picture.” Each transaction has its nuances and particular issues. Should you have any questions, please do not hesitate to call, and we will be happy to provide more information.
