- SELLING RESOURCES -
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Congratulations on accepting an offer! Now the closing process begins.
Most of the work during this period is handled by the buyer's lender, the title company and other professionals, but there are still several things sellers need to watch and complete before closing.
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The time between an accepted offer and the closing date is the pre-closing period. A financed sale often takes several weeks, although the actual timeline is whatever is written in the contract. Cash sales can sometimes close much faster.
The contract controls the dates. YELLOW tracks the important deadlines from the accepted offer so you know what is happening and when your attention is needed.
Several things may be happening at the same time:
The buyer handles most of the financing and inspection work, but sellers still need to stay involved. Respond promptly to YELLOW, the title company or anyone properly involved in the transaction if information or access is requested.
YELLOW SAYS...
DON'T ASSUME THE SALE IS FINISHED YET
An accepted offer is a major milestone, but several contract conditions still have to be completed before the sale closes. Keep the home maintained, stay responsive and avoid making plans that depend on the sale being final until the title company confirms closing.
Continue maintaining the home in substantially the same condition as when the contract was signed. Do not remove fixtures or items included in the sale, and avoid making major changes to the property unless they are required or agreed to.
If the home is damaged before closing by a storm, leak, fire or another serious event, contact YELLOW and the title company right away. The contract will control what happens next.
Title company Florida Title & Guarantee Agency has a comprehensive guide to the closing period. A PDF they created is linked below.
The inspection period is the amount of time given in the contract for the buyer to evaluate the condition of the property. It is usually much shorter than the full pre-closing period.
Even if you provided a pre-listing inspection, the buyer may still choose to have their own inspection performed.
A general home inspection may cover the roof, electrical system, plumbing, HVAC, appliances, windows, doors, structure and other visible parts of the home. Depending on the property and the buyer's needs, there may also be additional inspections.
Not every transaction will involve all of these inspections. Some are requested by the buyer, while others may be related to insurance or financing.
Inspection reports commonly identify defects, maintenance items and recommendations. That does not automatically mean the seller must repair everything on the report.
What happens next depends on the contract and any negotiations between the parties. The buyer may accept the property as-is, request repairs or credits, or exercise any cancellation rights provided by the contract.
YELLOW SAYS...
SAVE REPAIR DOCUMENTATION
If you agree to make repairs, keep receipts, paid invoices, warranties and photos of the completed work. The buyer may ask to see proof before the final walkthrough or closing.
If the buyer is using a mortgage, the lender has its own approval process. A pre-approval is helpful, but the buyer still needs final loan approval before the transaction can close.
The lender may verify the buyer's income, assets, credit, employment, insurance and other information. Sellers are usually not directly involved in this process, but financing delays can affect the closing timeline.
For most financed purchases, the lender orders an appraisal to estimate the property's market value. The appraisal protects the lender by helping confirm that the home supports the amount being financed.
An appraisal is different from a home inspection. The appraiser is primarily evaluating value, although the condition of the property can affect that value and certain loan programs may require particular property standards.
Make the property accessible and presentable. If you completed significant improvements, having a simple list of those improvements available can be helpful.
A low appraisal does not automatically cancel the sale. The effect depends on the contract and the buyer's financing. The parties may agree to a price change, the buyer may bring additional funds, another solution may be negotiated, or the buyer may have a contractual right to cancel.
Buyers using a mortgage will generally need acceptable property insurance before the lender will fund the loan. In Florida, the insurer may request information about the roof, plumbing, electrical system, HVAC, wind protection or other features of the home.
If the property is in a flood zone or the lender otherwise requires flood coverage, the buyer may also need flood insurance.
The title company handles much of the legal and financial preparation for closing. Many seller costs are deducted directly from the sale proceeds, although some repairs or other expenses may need to be paid before closing.
A title search reviews the public records to confirm ownership and identify recorded matters that could affect the sale.
Common examples include mortgages, judgments, liens, unpaid taxes, ownership issues, easements, restrictions or an old mortgage that was never properly released.
Finding something in the title search does not necessarily stop the sale. Many title issues can be cleared before or at closing.
If you still have a mortgage or other loan secured by the property, the title company will obtain a payoff statement from the lender. The payoff usually includes the remaining principal, interest through the expected payoff date and any other amount required to satisfy the loan.
At closing, the title company generally sends the payoff directly to the lender from the sale proceeds. You do not normally receive all of the sale money and then pay the mortgage yourself.
A municipal lien or permit search may be ordered to look for issues that do not always appear in the normal recorded title search. Examples can include code violations, utility balances, open permits and municipal assessments.
If you already know about an open permit, code violation or unfinished permitted project, bring it up early. These issues are much easier to deal with before the closing date arrives.
If the property is part of an HOA or condominium association, the title company may obtain an estoppel certificate showing amounts owed to the association. This can include dues, special assessments and other charges associated with the property.
Any seller amounts due to the association can usually be shown on the closing statement and paid from the sale proceeds.
"Title" refers to legal ownership of the property.
Owner's title insurance protects the buyer against certain covered title problems that existed before the purchase but are discovered later. A lender's title policy protects the mortgage lender.
Who selects the title company and who pays the owner's title policy and related title charges depends on the contract and local practice. In many Florida transactions the seller pays the owner's policy, but this is not universal.
Florida title insurance premiums use state-filed rates based primarily on the amount insured. The title company will calculate the exact amount for the transaction.
Florida charges documentary stamp tax on deeds transferring real property. This is a closing cost and is normally shown on the closing statement rather than paid separately in advance.
In most Florida counties, the rate is $0.70 per $100, or portion of $100, of consideration. Miami-Dade County uses a different rate and may have additional surtax rules for some property types.
Property taxes are usually prorated between the buyer and seller through the closing date. Florida property taxes are generally paid in arrears, so the closing statement commonly charges the seller for the seller's portion of the year and gives the buyer a corresponding credit.
The title company handles the calculation.
Repairs can arise in several different ways during the closing period:
Some repairs must be paid before closing, while an agreed credit can sometimes be handled on the closing statement. The contract and lender requirements determine what is allowed.
Before closing, the title company will prepare a settlement or closing statement showing the financial details of the transaction. Review it carefully.
Items may include:
YELLOW SAYS...
VERIFY WIRE INSTRUCTIONS
Real estate wire fraud is serious. If you receive new or changed wiring instructions by email, do not rely on the email alone. Call the title company using a phone number you already know is legitimate and verify the instructions before sending or redirecting money.
For financed purchases, the buyer's lender eventually completes underwriting and gives final approval to fund the loan. This is commonly called being "clear to close."
A cash purchase does not have a lender clear-to-close. Instead, the title company confirms that title and closing requirements are ready and that the buyer's funds are available.
As the closing date approaches, make sure the following items are handled:
Moving often takes more planning than sellers expect. Start early, especially if you will need a professional mover, truck rental, temporary storage or short-term housing.
If your closing date is several weeks away, begin getting moving quotes soon after the offer is accepted. Popular moving dates, including weekends, summer dates and the end of the month, can book early.
MOVING COSTS
Moving costs vary widely depending on the size of the home, distance, number of movers, stairs, packing services, storage needs, season and location. Get several written estimates instead of relying on one national average.
PODS and similar portable storage services can be a flexible alternative to a full-service mover. You load the container at your convenience, and the company stores or transports it when needed.
Portable storage can be especially useful if you need to remove excess furniture before listing, store belongings between homes, or avoid loading everything in one day.
"PODS" is the brand name of one company, but there are many similar services.
Shortly before closing, the buyer will usually perform a final walkthrough of the property.
The purpose is generally to confirm that the home remains in the agreed condition, agreed repairs were completed, included items remain with the property and the seller has moved out as required by the contract.
The final walkthrough is not normally a second home inspection or an opportunity to renegotiate unrelated issues. However, a new problem or an uncompleted agreed repair can create a closing issue, so leave the property clean and in the condition required by the contract.
YELLOW SAYS...
LEAVE THE HOME READY FOR THE BUYER
Be completely moved out by the required possession time unless the contract specifically allows you to remain after closing. Remove trash, take all personal belongings that are not included in the sale, and leave keys, remotes and access information where agreed.
