As your Realtor®, I will guide you through all of your contractual requirements
and coordinate with inspectors, appraisers, attorneys, the buyer's agent, etc.
Following is information on steps that take place, in their respective order, so
that you'll know what to expect along the way. (Note: The word "attorney," used
herein, is synonymous with "closing agent" or "settlement agent.”)
1. Ratified Contract
The contract is “ratified" when all parties have signed and/or
initialed all terms. Upon ratification, I'll send a copy of the contract
to you and your attorney.
At buyer's expense and within 10 days of contract ratification, unless
otherwise specified in the contract. Water and electricity must be on.
Parties present will be buyer, buyer's agent, & inspector. The seller is
not present, to allow the inspector and buyer to freely discuss the
property's condition. Should buyer desire any repairs, he/she must provide
a copy of the inspection report and a written request within the same time
period. The contract outlines a period of negotiation thereafter. Any
agreed-upon repairs must be completed prior to closing with enough time
allowed for buyer to inspect repairs, if desired.
3. Current Loan Payoff
As soon as possible please provide me with your current lender's name
and contact information. The loan will need to be paid off to convey a
clear title to the buyer so we'll need to order the loan payoff.
This sometimes may take a week or more so the sooner you can get it
to me the better prepared we'll be.
4. Appraisal & Title Search:
Once repair request negotiations are complete, the lender orders the appraisal
and buyer's attorney orders the title work. (Since these buyer fees are non-refundable,
it's become customary to wait until after the inspection.) The appraiser arranges access
me, and the title searcher doesn't need to access the home. Since the appraisal
“belongs" to the buyer, we may not be told the value, just whether it was sufficient.
Should the appraisal be less than the purchase price, there are 3 options. The
buyer can pay cash for the difference (unlikely), the seller can reduce the price,
or the contract may be terminated with neither party deemed to be in default.
5. POA or Condo Disclosure Packet
Ordered by you or me, depending on the association and delivered to buyer or
buyer's agent via electronic link, courier, parcel delivery, or mail. Buyer has
3 days from receipt or 6 days from postmark, if mailed, to review the packet and
terminate the contract, should the contents be objectionable. No reason need be
given, but written notice to terminate must be within the 3 or 6 day timeframe.
If no packet is available, buyer has the same time period, from our notification
of unavailability, in which to terminate. There is no deadline in which the seller
must provide the packet, but it's advisable to get this done quickly, so as not to
lose marketing time, should the buyer terminate on this basis.
6. Well, Septic, & Wood Destroying Insect
Customary for seller to provide at seller's expense. (Well & septic not
required on public systems.) The certificates must be dated within 30 days of
closing, so I order these about 3 weeks prior to allow for closing delays.
Water and electricity must be on. The septic is a "walk-over" of the drain
field, unless otherwise specified, and the well is tested via water sample
from outside faucet. With vacant property, they usually do chlorination prior
to taking the sample. If the septic hasn't been pumped in accordance with
health department regulations, the septic inspector may pass the system,
contingent on this being done. The wood destroying insect certificate is
issued based on a visual inspection. (This bill is sent to the attorney to
be paid out of closing proceeds.)
About 2 weeks before closing, start looking into forwarding mail and setting up utilities in your new
residence. You may want to schedule cut-off dates for services such as trash pick-up, cable, etc.
DO NOT set a date to cease electric and water service. The buyers should transfer services effective
as of the closing date. | recommend contacting these providers the day of or day after closing to
ensure this was done. If not, feel free to request termination, but let me know so I can give the
buyer's agent a courtesy reminder to have them take care of this.
The seller meets with the attorney day or so prior to the closing day to sign the deed along with a
specific power of attorney so the final docs can be generated by the attorney on seller's behalf, at
closing. There are also forms required for tax reporting, proceeds disbursement, and current loan
payoff that may be requested prior to or along with deed signing. In the case of an out-of-town seller,
the documents and instructions will be mailed or emailed. The signing of these forms must be witnessed
by a notary public, which can usually be found in a bank, circuit court, library, insurance office, etc.
Some charge a fee, but often the service is free to someone with whom you have a business relationship.
9. Vacating Procedures
You must have all belongings off the premises and house clean before closing and,
preferably, before walk-thru inspection, which is scheduled the day before or morning
of closing. If you plan to sleep at the house the night before closing, you should
clear all but bare necessities and clean so everything is visible and acceptable to
buyer for walk-thru. Cleaning is "broom swept” meaning basic cleaning, wiping out
appliances, grass cut, etc. Don't remove any detached fixtures, unless agreed upon
in the contract, which specifies what items are to convey with the home. Leave
keys, garage remotes, & any useful info you have (manuals, instructions for
filtered systems, etc.), and pull door locked behind you. The selling agent
will get the key from the lockbox at walk-thru to deliver to the buyer at closing,
and I'll collect my sign & lockbox later.
The day before or morning of closing, a settlement statement (HUD) is prepared showing all charges and
credits. Both agents and attorneys will review this for contractual and mathematical accuracy.
Attorney will email it to you and go over it via phone for verbal approval. It's no longer
customary for a seller to actually "attend" closing.
11. Expenses & Payoffs
The buyer's closing attorney records the documents and disburses funds. Seller closing fees
and payoff of any liens are deducted from the funds and paid by the attorney. Along with the
deed, certificates of satisfaction are also filed to record the payoff of current liens.
(This is necessary in order to convey clear title, so there isn't an option for seller to
receive funds and pay off liens personally.)
12. Receipt of Proceeds
VA law allows 3 business days for deed recording and proceeds disbursement, but it's usually
done the next business day. You can choose to receive funds via pick-up, mail, or wire transfer.
Most banks charge a fee for wire transfer, but funds are immediately available. Although closing
checks are usually certified, banks typically put a 7 day “hold” on the funds. I'm happy to pick
up and deliver checks to my sellers, if opting for a check.