How Does the Closing Process Work in a Real Estate Transaction?
Reviewing the real estate closing process and closing costs for sellers who are selling a home for the first time.
The closing process for real estate transactions can often seem mysterious and confusing to sellers and buyers participating in the sale of a home for the first time. While real estate closings are handled differently from state to state, the result of a successful closing is the same. In this Seller’s Guide article, we’ll take a look at the closing process and exactly what happens at closing when you sell a home in North Carolina.
Real Estate Closing – What is It?
Simply put, a North Carolina real estate closing is the culmination of a buyer and seller fulfilling all the agreements of a sales contract. At the closing, the seller will transfer the property to the buyer, fully pay off any mortgages, and receive any sales proceeds.
While the result is the same, the closing process does differ from state to state. North Carolina real estate closings are handled by an attorney who specializes in real estate. In some states, instead of a closing attorney, a title company or escrow company will manage the closing for buyers and sellers.
What Happens at Closing?
Depending on where the real estate sale takes place, the closing may consist of a process that goes through escrows over a period of days. Some states, including North Carolina, have a table closing. At this type of real estate closing, all the parties involved convene in an office to finalize the process.
A seller and listing agent should bring all relevant documents to the closing in case any questions or issues arise. During the closing meeting, the seller signs certain documents transferring property ownership. The buyer, however, will sign the majority of documents. The best part of the real estate closing for sellers is receiving the proceeds from the sale.
Seller Closing Costs
Unlike closing costs paid by the buyer, seller closing costs are deducted from the proceeds of the sale of your home. We touched on this subject in another of our Seller’s Guide articles because it is important to understand these costs when calculating your selling expenses and determining your bottom line sales price. Let’s take a look at a few of those North Carolina closing costs for sellers once again, keeping in mind that these costs vary from state to state.
- Real Estate Commissions – Often up to 6% of the sale price, the commission paid for selling your home is negotiable.
- Mortgage Payoff – Don’t forget that you have to pay the balance on any mortgages or liens on the property.
- Taxes and HOA – Seller closing costs also include paying prorated amounts of taxes and HOA fees.
- Tax Stamps – This is a transfer tax paid to the county for the privilege of selling your home.
- Attorney Closing Fee – Payment to the closing attorney.
- Any negotiated Seller Paid Closing Costs – Often, as part of the final purchase offer, the seller may pay some of the buyer’s closing costs.
There’s a brief overview of how the closing process works in a real estate transaction. Are you thinking about selling your North Carolina home? Contact us today, and you’ll experience a smarter, more successful way to sell your home in Durham, Raleigh and Chapel Hill.