What Happens On Closing Day?
Selling your home can be a confusing process, especially if you have never sold a home before. That’s why when you sell your home to Nexus Homebuyers, we want closing day to be one of the easiest and happiest days of your life. We have been able to fine tune the closing process through years of buying houses and pass that along to you to make closing day as easy and straightforward as possible. By the time you finish this guide, you will know exactly what happens on closing day, and what to expect.
The actual sale of your home takes place at an attorney’s office or title company through a process called a “closing” or “settlement”. During the closing, ownership of a property is transferred from the seller to the buyer. The title company handles the funds and paperwork, and the new deed is recorded in the buyer’s name. The seller receives their funds and the buyer receives the house or property after the documents have been signed.
After you have met with our home buying manager, Nexus Homebuyers will submit your signed purchase and sale agreement to our local title company. Once they have received the documents, they will confirm they have everything the need to start the closing. If anything is missing, they will contact us or may even reach out to you to obtain any missing documents.
What happens at the closing?
The buyer will sign more paperwork than the seller. The title company will have prepared these documents in advance, and they will just need to be signed. Some of the documents can include a HUD-1 settlement statement, the note, legal disclosures, and more. Before the paperwork is singed, the title company orders a title search and updated lien payoffs. A title search is a process where the title company pulls the public records related to the property and ensures that the person selling the home has the right to sell it. The title company also pulls lien payoffs to make sure that there are not any outstanding balances owed against the property, and if there are to obtain the exact amount owed. These balances must be paid on the date of closing.
In the event of a problem with the chain of title or additional lien payoffs, more time may be necessary to clear these problems. The title company may need to talk with more people or obtain additional lien payoffs that need to be fulfilled at closing. The title company is well-equipped to handle this and can usually come to a solution quickly. It is their job to ensure that the title is clear and that you have the right to sell. The title company will do their best to honor the original closing date, but sometimes they may need additional time to resolve the issues. This in turn, may delay closing by a few days.
The title company will coordinate the closing times and dates between you and Nexus Homebuyers, on the day and time that works best for you. The closing takes place at the title company’s office or at a location that works best for you. You will meet with the closing attorney who will walk you through the closing process and answer questions. The closing attorney will confirm that you are the rightful owner of the property and will review the HUD-1 settlement statement with you. The HUD settlement statement details all the debits and credits that you receive when you sell your house. They will then review the deed of trust with you, which grants ownership to the new buyer. Once the documents have been signed, you will be asked how you would like to receive your funds. All documents must be signed before funds can be released in Tennessee.
Who is involved in the closing-day process?
Although closing practices vary from state to state, the following people are using present or involved in a closing:
- Home seller
- Home seller’s real estate agent (only if the home was listed)
- Title company representative
- Attorney(s) – Buyer and lender may have attorneys
- Closing agent: This person makes sure the closing is scheduled and that all the necessary documents are signed, along with making sure escrow payments and fees are collected.
- Home buyer
- Home lender (If a loan is being written for the home)
What are closing costs?
Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction. These can include, lender costs, title fees, interest, escrow balances, commissions (if any), transfer taxes, and other services provided over the course of escrow.
What is escrow?
Escrow refers to when a third party, in this case the title company, holds onto funds or documents during a transaction. In this case, they will be holding onto earnest money which is put up after the purchase and sale agreement is signed.
What is a HUD-1 Settlement Statement?
A HUD-1 Settlement Statement is a standard form to itemize debits and credits charged to the buyer by the lender or broker. It is also referred to as a “Settlement Statement”, “Closing Statement”, or “Settlement Sheet”. The form is signed by both the buyer and seller, and the buyer has the right to inspect the form 1 day prior to closing. This form is prepared by the closing attorney at the title company. You can view a sample HUD-1 form here.
What is title insurance?
Title insurance provides protection to real estate owners and lenders against property loss because of liens, encumbrances, or defects in the title to the property. Title insurance protects against past events on the property and the people who owned it. It gives the buyer an insurance policy in case someone else makes a claim against the property. Lenders must receive title insurance and is required by the bank to protect the banks interest in the property. This policy is paid once at closing and will protect the owner as long as they own the property.
What is the deed of trust?
A deed of trust is an agreement between a lender and a borrower to give the property to a neutral third party who will serve as the trustee. The trustee holds the property until the borrower pays off the note or debt. The borrower keeps the equitable title to the property and is responsible for the home, unless stated otherwise in the deed of trust. The legal title is held by the trustee.
The deed of trust is normally recorded with the county clerk for the county which the property is located as evidence of and security for the debt. The act of recording provides notice to the world that the property has had a lien placed on it. When the debt has been repaid, the beneficiary is required by law to direct the trustee to transfer the property back to the grantor, thus releasing the lien on the property.
Sell Your House On Your Terms…
If you need to sell your home…fill out this form to get your fair all-cash offer!