Seller Preparing for Closing

In this article, I'm preparing sellers for closing.

1. Caveat When Seller or Buyer Possession Agreements Are In Place

When a seller or buyer possession agreement is in place, keep in mind that much of the below will be thrown off in timing. Refer to the terms of the seller or buyer possession agreement regarding timing.

2. When no home inspection contingency remains, how confident should sellers be on closing?

The primary hurdle after contract ratification between buyer and seller is the home inspection, but even after repairs are agreed on, & even if there's no home inspection contingency, that doesn't mean that sellers should completely bank on a closing. There are plenty of examples I've seen in transactions where I've personally represented buyer or seller where a contract either got derailed or that could have been derailed that weren't predicated on the home inspection.

For example, a home inspection, an appraisal, well inspection, septic inspection, title search, & termite inspection went fine. Before closing, the sellers, not wanting to take off of work to wait to move after the buyer was clear to close, moved out of a home the weekend before the week of closing. The contract fell through the week we were scheduled to close due to the buyer's financing in light of the buyer's fraud. Apparently ,the buyers hadn't paid taxes in years, and while I knew their local lender, who had been a lender for decades, somehow he didn't catch it. The home, now unstaged, with holes in some walls, & not in as good of a market season, eventually sold for approximately 4% less after time and price reductions went by. Based on my recommendation, we struck the release and hold harmless language that comes with the release agreement presented to us and eventually terminated without a consummated release based on our contractual right to do so. While we attempted to pursue the buyer for performance or the difference once we received that 2nd offer, which can work in some cases, the attorney we worked with did not seem optimistic about our chances of winning a lawsuit after more details regarding the buyer's financial situation were revealed with the threat of a lawsuit from the sellers present.

With many scenarios in addition to the above in mind, I hope that you're not scared or anxious, but I hope that you're also not so comfortable with passing the home inspection that you assume it'll be smooth sailing from there to the degree that you move items out of the home immediately after.

3. Get any remaining unpaid invoices & paid receipts/reports to your agent if applicable & ensure that they know what's not been paid for yet, if applicable.

In the event that I don't have all paid invoices/receipts/reports from your end (i.e. inspection repair request completed work if applicable, termite/moisture invoices if applicable, etc.), it's best to send any remaining one(s) to me prior to buyer walk through inspection. In the event that payment is made within 2 business days prior to closing, it's not a bad idea to wire it or use other certified funds like a cashier's check instead of using a credit card in order to ensure that paid receipts are available prior to closing. On one occasion work was completed the day prior to closing for a seller, which was a Thursday, the seller paid with a credit card that Thursday, but we didn't receive a paid invoice from the termite/moisture company until Monday, slowing down the disbursement of funds to the seller and annoying the buyer/buyer's closing company.

If a company refuses to provide you a paid invoice or if you are low on time between when the closing occurs and when you get the closing disclosure that shows an unpaid item that's been paid (I've seen <3.5 business hours from a scheduled closing time), often sellers can provide information from their bank/credit union that shows that funds were disbursed to that service provider.

For any unpaid invoices, please make it clear to the closing company and to your agent that those have not been paid yet and that they will be paid at closing.

4. If occupied: Move items out and clean, ideally 24 hrs before the buyer's walk-through inspection & after the buyers are clear to close.

Buyers usually perform a walkthrough inspection 12 hrs to 5 days (sometimes even more than 5 days if heavy repairs/corrections are involved, where a double walk-through inspection can even occur, 2 separate walk-throughs) before closing on a vacant home or 12 hrs to 72 hrs ahead on an occupied home if the seller is vacating immediately prior. There is a walkthrough report for them to fill out to make sure that (if applicable) all repairs/modifications are completed appropriately, all personal property not conveying with the home is out, all personal property conveying is present, and everything else is in order as it was during the inspection time, or better. When this form is filled out, often, but not always, it will be sent to the listing agent for seller signatures. You don't need to sign unless they are asking for anything to be done or where the buyer's agent is specifically requesting it, in which case we can discuss prior. (if you occupy the property or applicable to tenants occupying the property)

After the home inspection contingency (if applicable) has been removed, the title search is back, the appraisal (if contingent on appraisal) is back, & other contingencies (i.e. termite/septic/well inspection) have been removed, if you haven't already started packing I'd suggest it. While there is a chance that something could happen between now and closing that could make things fall apart (i.e. if the buyers lost their job, bought a car on credit if that would push them over the limit of their DTI, etc.), it's unlikely. It's best to arrange moving in such a way that it can be shifted without penalty if possible even though we don't anticipate any delays. It's also best to have any/all items moved out by 9 AM the day prior to the official closing date (by 9 AM Sat if closing on Monday & also an extra 24 hrs before if the day prior to closing is a federal holiday). Walk-through inspections are best done with an empty house though if it's to be done 5 days prior to closing and it's difficult for you to get things out by then, it's perfectly fine to continue moving items out until closer to closing. Also, please let your agent know when you expect to have the home ready for walk-through & again once your move-out is complete so that I can update the buyer's agent.

If you're unable to get the property ready in a time that works for the buyers to see it before closing, closing may be delayed. If they see it right before closing, and there are issues, they could also delay closing until you have fulfilled your contractual obligations, even if you're unaware of anything that you haven't done by the book.

5. If personal property is in the home: Send pictures of items left at house not in the contract & send to your listing agent in advance.

For any items that will be left at the house that are not in the contract, such as undesired paint cans, furniture, cleaning supplies, pesticides, air filters, flooring, siding, etc., if you could send me information and pictures that I can relay to the buyer's agent, that is ideal.

There are some items you don't need to take pictures of that buyers typically love to see left in homes. These include:

1. Any remaining keys to the home not provided to your agent already

2. Any warranty information or instructional information regarding home fixtures

3. Some sellers like to go to the next level here with a detailed list of various tips and instructions and even sometimes a small gift. They'll do that sometimes in one consolidated location or include notes at various locations (i.e. light switches). While not required, it's almost always appreciated.

There are certain items that shouldn't be removed from the home/property unless written into the contract, but this area can be tricky.

• Contract terms - anything that is explicitly listed in the contract as conveying shouldn't be removed. In the REIN Standard Purchase Agreement, see section 15 "Items to Convey".

• Art - most art, such as that which is loosely hanging on a wall with a nail, should be removed unless you wish to leave it for the buyer and the buyer would prefer to have it

• Cameras - Hard-wired cameras should typically not be removed, while easily removable (even if by screws) cameras with either no built-in wires or a wireless setup would more typically be something that a seller could remove if desired.

• Built-ins - i.e. ceiling fans, light fixtures, built-in shelving, & most other items attached to the home by screws, nails, glue, etc. shouldn't be removed.

• Plants - If you have any perennial bushes, trees, or otherwise, these should not be removed unless explicitly stated in the contract or otherwise agreed to in writing by the buyer. Conversely, it's no problem to harvest berries from a bush or to remove plants that would die at the end of the year like in a typical vegetable garden.

6. Schedule utility cut-off (or turn-on) to occur if you are responsible for having them on. See details on when.

A. If you already have utilities on:

It's a good idea to have all of your utilities scheduled to be cut off 2 business days after the buyer's closing, but when you set that up is a delicate matter since sometimes the closing date will shift.

Contact the utility companies after the later of the following times:

1. All contingencies have been removed

2. the buyers are clear to close (if buyers are using a mortgage),

3. After any title issues have been resolved after the title search has come back from both sides

4. after any repairs,

5. after other contractual obligations of yours have been fulfilled

6. after any very strong weather that could easily damage the house forecasted (i.e. record low temperatures for the year, heavy snow, strong ice storm, hurricane, etc.) has come through the area in the 6 business days prior to closing & the business day after closing

7. 6 business days prior to closing,

8. After the agents on each side and closer on each side have confirmed that the scheduled closing date will be doable

Typically the buyer will already have theirs set up for the day of closing, but there are some cases where buyers will milk a seller's utilities as long as they don't stop the utilities. That said, if closing gets delayed, be sure that utilities know that they shouldn't cut the utilities off until the business day after the buyer's closing date. Sometimes utility companies can't do same day shifts, and in rare cases it could take up to 5 business days for cut off from the time of request to the time of turn off, with some utility companies depending on other utility companies to be on. It's a lot better to pay a little extra for a few days of utilities after closing than it would be for there to be a lapse in utilities resulting in damage to your home, thus my recommendation for 2 business days after rather than the more commonly recommended 1 business day after.

B. If you don't already have utilities on:

Be sure to schedule these to turn on in advance of the walk through inspection. For instance, I've seen where a tenant moved out around the 25th of June with utilities scheduled to be cut off the following Monday, the 30th. The seller didn't reach out until that Monday, when the utilities were already off. They said that the utilities couldn't be on from the seller until the following Monday.

7. Verify that you've met all your other contractual requirements.

Go through the contract &/or your responsibilities & obligations checklist to ensure that you've fulfilled all of your contractual requirements, such as (in some cases):

• wood-destroying insect inspections (some REIN & most VAR contracts)

• wood-destroying organism inspections (some REIN contracts)

Also, be sure to check on if any repairs are completed/look good, especially if you're not occupying the home and wouldn't notice otherwise. Request pictures/video from contractors in advance at the time that you book them.

8. If you have a home warranty, check to see if it can be transferred to the buyers or your new address.

Typically buyers & buyer's agents won't ask for it, but regardless, if you have a home warranty that doesn't expire until some time after closing, check to see if it can be transferred into the name of the new buyer(s). Beyond the ethical implications of something that could cost you very little time and provide high value to your buyer(s), you never know when they might return some kindness when you could use it, i.e. not being as picky as they might be otherwise on the final walk-through inspection.

9. Keep in touch with your closing company.

Be sure to keep in communication with your closing company, especially during normal business hours when they are better reached, asking them if there is anything that they need. For instance, it is important to ask them about whatever wiring information is needed. One company I've worked with has stated that they "will only accept wiring instructions on our notarized proceeds authorization form delivered with the original deed package. Deeds are to be in our office by 11 am the day before closing."

10. Scheduling document signing.

What you'll need to bring to closing:

You'll need your driver's license or another similar form of ID (i.e. passport). You'll also need to know your social security number.

If you are receiving a wire, you may also need to know your bank/credit union account information, including the name of the institution, address, account number, routing number, and your name as it's listed on your account.

Closing Date:

While closing for buyers typically occurs on the closing date in the contract, closing for sellers typically occurs the day prior to that, or long before that when you have things ready and when the buyers are "clear to close" with their lender (if not a $ deal).

Closing Time:

It's not necessary for listing agents to attend closing, and likely the majority of listing agents in SE VA don't tend to be there for closing. Adam likes to when possible. If you want your agent to be there, it's best to coordinate a time with them. Otherwise, they may not be able to make it all, will be more likely to be late, or will be more likely to need to leave early. Your agent also may not even mention that it's a bad time for them if you don't coordinate with them for a time since it's not typical for agents to be there.

In office vs with Notary:

Closing can occur at the closing office or with a notary chosen by the closing company. If you don't have a mortgage and you prefer to save some $ even though it will mean a higher probability of needing to make some calls to the closing company, ask the closer if they'll allow you to pick your own notary. Some will and some won't due to all the catfish sellers that are around these days, particularly on vacant land, but often they won't let it happen on homes as well due to fraud. If closing with a notary, it's important for you to set things up for closing with the closing company with advanced notice since mail will be overnighted in order to make the closing happen from a distance. With your outgoing mail for closing, be sure to record any tracking numbers.

11. Review the Closing Disclosure/ALTA

The documents signed depend on whether or not you have a mortgage on a property, but be sure to carefully review the CD and ALTA prior to closing so that you're not catching problems at closing that could delay closing. Send a copy to your agent as well just in case they weren't also sent a copy that you can see them CC'd on. Be sure to look for the following:

1. Does your name match your current legal name & the name on your driver's license or other form of ID like your passport that you plan to use at closing?

2. Do all unpaid expenses appear accurate (i.e. repair expenses matching your latest invoices, etc.) & are you not being asked to pay double if you've already paid for something? See the Responsibilities & Inspector Options Including Deadlines Template for REIN & VAR Offers spreadsheet for typical contractual locations & wording in REIN & VAR contracts of expenses like well inspection

While not fully comprehensive, here's a list to check on:

Item	For Buyers	For Sellers
Commissions	X	X
Earnest Money Deposit	X	X
Closing Company Fees	X	X
Termite	X	X
Title Insurance: Lenders	w mortgage
Title Insurance: Owners	recommended
Taxes	X	X
HOA/Condo Fees	if HOA/Condo	if HOA/Condo
Other Pro-Rations	Sometimes	Sometimes
Repairs	Sometimes	Often
TC Fee (i.e. none to GRP)	Often other side	Often other side
Warranty at amount in contract if applicable	sometimes	sometimes
divorce split correct (i.e. mobile notary for 1)	sometimes	sometimes

12. Initiate mail forwarding if you haven't already (especially owner-occupants).

Especially if you're an owner occupant, and sometimes for landlords, you might want to go ahead and look into mail forwarding to your new address so that once you have a new address to send to you can pull the trigger. It's also best to change the addresses, especially with important institutions like banks and anywhere that bills are paid from, because mail forwarding is for a limited time only.

13. Ensure all keys are at the property & all combinations are provided to the new homeowner.

While the keys/codes to the entry doors aren't often forgotten, keep in mind locations like the following:

• safe(s) conveying with the property

• coded entry to the garage

• gate keys

• interior door keys (i.e. to bedrooms)

• mailbox key(s)

14. Ensure your homeowner's insurance is canceled.

Your insurance company may not get the memo that you closed. Be sure to contact them directly in writing to cancel your policy and get confirmation of the cancellation in writing.

15. Get Your Proceeds

At closing or before you can arrange with the closing company how you'll be getting your proceeds. Options often include pick up, wiring (with some companies), or overnight mail.

If picking up your proceeds, be sure to have a picture ID like a driver's license. Typically proceeds are available within 2 business days of the buyer's closing in VA based on the legal requirement. If picking up & you haven't been notified by then, contact the closing company. Be mindful of fees for doing something other than picking up your proceeds which vary according to the buyer's closing company. If someone other than you is picking up, be sure to let your closing company know their name.

Related:

1. Owners

2. What Can Go Wrong in a Real Estate Deal After a Home Inspection Contingency Has Been Removed or if There's No Home Inspection Contingency?

3. Utilities List for SE VA (Primarily Hampton Roads)

4. When Buyers Will Typically Perform a Walk Through Inspection

5. Walk Through Inspection

6. House Seller Guide

7. What Adam Offers Sellers