Congratulations! You’ve made the decision to sell your home. You’ve packed and cleaned and scrubbed until your house was in tip-top shape. You’ve found a buyer and settled on a purchase price…now what? Do you need to have a written agreement? What has to happen before the purchasers can move in and you can move on? The easy answer is that you need to begin to work towards closing your transaction!
I Thought Closing Was Only for Buyers?
Many people believe that closing on a real estate transaction is something you have only have to do if you’re the one buying the house. This is incorrect. In fact, the seller is typically responsible for signing multiple documents that help to ensure that the sale of the house is done in a legal fashion. Of course you’ll sign a settlement statement, just like a buyer would, that details your fees and proceeds, but you may also need to sign the following:
- A Certificate of Reporting – which provides any necessary tax information pertinent to your sale;
- A Deed – which is the document responsible for actually transferring the title of your property from the seller to the buyer;
- A Power of Attorney – which allows your closing agent to make any necessary corrections or changes on your closing documents; and
- Various Disclosures – which help to prove that the property you’re selling is marketable.
A meeting is scheduled for around the same time the buyer signs their own paperwork. When both parties have signed all of the required documents then you can move on to disbursements (the part where you get your money)!
You Mentioned A Closing Agent?
Oftentimes, there are multiple people involved in a single real estate transaction. Here are the two most common people (aside from the purchaser) that you’re likely to interact with while selling your home:
- The Realtor – This is the person that helped you find a suitable purchaser for your home. They have arranged showings and assisted in determined and negotiating your sale price. Once you agreed on a purchase price, the realtor then works hard to ensure that the rest of your sale-process goes as smoothly as possible.
- The Lawyer (or Title Company) – The Lawyer, or a closing agent from a title company, is a key individual in your sale process. He receives information from both the realtor and the purchaser’s representatives. Then, he uses that information to make sure that the sale of your home is conducted in a responsible, legal manner. His duties may range from identifying and locating mortgage payoff information to double checking how your property is currently titled. He creates your settlement statement and then verifies it with all of the other parties involved in your transaction. More often than not, it is the Lawyer or closing agent who walks you through all of the documents you need to sign, and then helps to disburse funds towards any fees you owe in association with your sale.
What Kind of Fees? How Much Will Closing Cost Me?
Closing costs can vary from sale to sale. They are dependent upon several factors like the purchase price you agreed upon, the date of your closing, and the location of your property. Generally, you can expect to pay:
- Recording Fees – These serve as a transcript, or record, of what happened during the process of your sale. For example, you may record a Satisfaction to show that you no longer have a mortgage on the property you are selling.
- State Deed Tax – This is a tax amount that is paid anytime a property is transferred as part of a sale. In Minnesota, the amount is calculated by multiplying your purchase price by 0.0033.
- Commission – This amount will compensate your realtor for the hard work they did in order to help you sell your home.
- Settlement Fees – These serve to reimburse your lawyer, or closing agent, for the work that they did in order to prepare your documents and execute your sale.
Please remember that while this list encompasses the most common fees associated with selling your home, it is not all-inclusive. Check your lawyer’s website for a Closing Cost Calculator that may be able to provide a more specific estimate of costs associated with your sale.