Step 5: What Happens at Closing?

After the terms are worked out between you and the buyer, the sale is finalized at a meeting called a closing. At this meeting, both the seller and the buyer, accompanied by your respective real estate agents and sometimes lawyers sign the settlement papers. Monies are collected, any existing loans or liens are paid, the deed is transferred, and title insurance is issued.

The closing is scheduled and coordinated by a title company, usually 30 to 45 days after you have signed the purchase agreement. This gives the title company time it needs research your deed, purchase title insurance, and prepare all of the documents. The title company is responsible for getting everything signed, handling the money, and filing the necessary paperwork with the government. After all fees and your mortgage balance is deducted from your proceeds, you will receive a check for the balance at closing.

The day of the closing, the home's buyer will do a "walk through" of the property to make sure all agreed repairs have been completed and that the home is in the same condition as when the offer was made.

Expect to sign a lot of papers, including:

• An affidavit specifying the purchase price and indicating the source of the purchase price. (This affidavit assures the lender that the buyer has not received any undisclosed loans from you that could negatively affect the buyer's ability to repay the lender's loan.)
• A bill of sale transferring ownership of any personal property that may be included in the sale.
• An affidavit of title in which you state that you have the legal right to sell the real estate and that there are no judgments, mortgages, or taxes owed on the property.
• The deed transferring title from you to the buyer.