After months of preparation, marketing, and negotiations, you’re finally ready to close the sale of your home. While these are exciting times, there’s also plenty of work that still needs to be done.
What is closing?
Closing is the day you and the buyer sign the final papers for the sale of your property. It usually takes place four to six weeks after the signing of the purchase agreement. At this time, all the processes and requirements to close the sale have been completed, including the removal of all contingencies, home inspections, and home appraisal.
Closing takes place when the buyer completes the mortgage application process, and their bank or lender is ready to transfer the payment to you. In turn, you should be prepared to transfer the title of the property to the buyer.
The date of closing should be indicated on your purchase agreement. The buyer is obligated to meet this deadline, and if they can’t, they have to seek a formal amendment to the agreement.
The actual closing date may be earlier than what’s on the contract. Your real estate agent and the buyer’s agent will be closely monitoring the closing process and will inform you once the schedule for closing has been set.
What documents need to be prepared and signed at closing?
The paperwork required at closing includes:
- HUD-1 settlement statement, which is an accounting of all the payments exchanged in the transaction
- Certificate of title
- Loan payoff, or the amount of your loan that needs to be paid at closing
- Bills of sale, which details all personal property that you’re including in the home sale
- Statement of closing costs
- Statement of information, which requires you to confirm your identity
What happens at closing?
In a traditional closing, you, the buyer, your respective agents, and other parties, such as lawyers and lenders’ representatives, meet at a neutral location, typically the office of the escrow officer or the title company. At the closing table, the closing agent — usually the escrow agent or a representative of the title company — explains all the documents that need to be signed, and makes sure the right parties sign them.
While this is the typical closing procedure, there are variations:
- The buyer and seller may sign the needed documents in separate rooms
- The seller may sign the documents in advance and be represented on closing day by their agent and/or lawyer
- The documents are signed separately by the buyer and seller in the presence of a notary public and mailed to the closing agent
- The closing process may be done virtually in a process known as eClosing
A Closer Look at eClosings
In an eClosing, all or some of the documents may be signed and processed electronically, and the meeting among the different parties may be done by teleconferencing.
Before the pandemic, Colorado has approved a modified form of eClosing, where electronic notarization is allowed, but the signer has to be in the presence of the notary to affirm and acknowledge the document. However, on March 27, 2020, the governor issued an executive order allowing notarizations to be completed even without the physical presence of the signer. The executive order is set to expire on May 30, 2020, and it remains to be seen if it will be extended for a third time.
With this order in place, plus the temporary rules and guidelines issued by the Secretary of State permitting remote notarizations, closings in Colorado may now be done completely online.
Selling your home in Boulder, CO during these challenging times?
We, the Noel Team, have the experience, knowledge, and expertise to help you navigate this complex market. Call us today at 303.774.9400 or email sjnoel(at)remax(dotted)net today.
