House Closing Process for SELLERS
Usually when we talk
about closing on a sale of a home, it
centers around the party that is buying, but the house closing process for the
seller also has it’s requirements.
For most sellers, it
can be a matter of signing the paperwork and sitting back to wait for a check.
But Often, sellers are nervous or apprehensive about what the final closing
One question I am
often asked when listing a home is ‘ Does my spouse have to sign if I’m the
only one on the deed’?
1. Only One Spouse on
The answer is Yes.. The
seller’s spouse will probably need to sign, Even if only one spouse was listed
on the deed.
This is because the
spouse has a marital interest in the property and that interest must be dealt
with before the property can be conveyed to the buyer.
Unless the seller has
some sort of marital release signed by the spouse, or other documentation
showing a release of the spouse, then the seller’s spouse will need to
2. All Liens to the
property must be paid in Full
The closing agent will
have to pay off ALL liens against the property.
We all know that if
there is a mortgage against the property, that certainly has to be paid.
But there also may be
tax liens, or judgments. In addition, you as seller, may have taken out an
equity line of credit at some point. This would need to be properly closed out
to avoid any future liens after closing as well.
All of these will have
to be paid in full at or before closing.
The closing agent would have performed a title
search earlier in the closing process to determine if there are any additional
liens, and will ask for your account numbers,social security number so they can
obtain the exact payoff of these liens. But don’t worry, if there is any
overage paid at closing you will receive a refund from the lender after
3. The IRS. Get Professional Tax advice.
The closing agent will
have to report the sale to the IRS.
They will provide you
with a 1099-S form at the time the deed is signed at closing asking for a
At the end of the
year, Form 1099 is transmitted to the IRS to show the full sales price of the
In most cases, a
seller may not owe anything to the IRS from the sales proceeds.
However, you may end
up owing taxes on the proceeds called capital gains.
This is determined by
several factors. I strongly urge you to consult with a tax professional to
determine what tax liability you may have that would apply to your particular
You don’t want any
surprises at the end of the year!
4. You Do Not Have to
be Physically Present at Closing
It is a common
misconception that all parties must sit down together at the closing table to
sign. This misnomer often causes stress for the seller who may be out state or
just a bit worried about scheduling.
In most cases parties prefer to sign
Typically, the sellers
closing package is very short, while the buyers closing can be very long. The
buyer may feel more comfortable with the sellers not being present while their
finances are being discussed.
Both parties can still
meet, if they want, to discuss matter about the house, but there is No
requirement for everyone to be present, together, at the actual closing.
5. WHEN you receive your Sales Proceeds
sure you tell your closing agent How you wish to receive your proceeds. This
may be in form of a check or wire transfer directly into a bank account of your
your buyer is financing, your proceeds will Not be dispersed until the buyers
lender has approved all the paperwork. In most cases this all done within the
day of closing, especially if your buyer had a morning closing. If you have a
cash buyer, your proceeds will be dispersed right away provided that all liens
against your property have been satisfied.
Clear lines of Communication = Smooth Closing
As I talked about last
week, No 2 closings are alike, and I just touched on the basics here today. The
key to successfully closing on a property, is to have a seasoned Realtor by
your side, and Clear communication with your closing agent.
In the description, you’ll find my 21 page Sellers guide. In it,
you’ll find everything you need to know to properly prepared to Sell your home
and have a smooth and stress free closing. It’s my gift to you for taking the
time to watch this video today. Enjoy!