Settlement

Signing Papers and Transferring Keys

The big day is here! Tonight you can pop open the champagne, but today there will be a lot of paper signing and a poignant passing of the keys (don’t forget the garage keys, and the electric garage opener, too).

At the settlement there will be an attorney or title company representative, the buyer, listing and selling brokers, and all owners. The home seller should bring all warranties on equipment (or leave them in the house) and any instructions on equipment maintenance or operation.

The attorney will have searched the title, and obtained old and new lender instructions. First, all unresolved walk-through deficiencies are resolved.With the buyer, the attorney explains the deed of trust, deed of trust note, and settlement sheets. The buyer signs all three, and pays the balance of the down payment and buyer’s closing costs.

With the seller, the attorney explains the deed and settlement sheets and gets the home seller’s signature on them. The seller pays appropriate closing costs.

Seller’s Settlement Costs

Closing costs for the seller may include: (Again, ask your listing broker.)

• Attorney’s fees (preparation of the deed, settlement fee, and any release fees)
• Lender’s inspection fee
• Appraisal
• Broker’s commission
• State deed transfer tax or recordation fee
• Condominium or homeowners association packet fees
• Water escrow (to reduce, bring canceled check and last bill; amount prorated at settlement)
• Termite inspection
• Loan discount fee (points based on loan amount)
• Interest up to the date trusts are paid off

If the seller’s taxes or insurance have been escrowed, the seller will receive any money accumulated in the account for bills not yet due. Additionally, the seller will be reimbursed for any money paid in advance and not used, such as property taxes. The seller will receive these refunds at or after settlement, depending on the locality. Taxes and homeowners association dues or condominium fees will be prorated on a daily basis. The seller, buyer, and brokers are supplied a copy of settlement sheets for their records. The house keys are transferred to the new owners.

Disbursement

The attorney or title company will disburse funds after all funds are in hand, checks have cleared, the new lender has reviewed papers, and the title has been re-checked and the deed recorded. The seller should not plan to receive funds for up to four days, although they may be disbursed the same day in some localities. Check with your listing broker.

The house has now been sold, settled, and funds disbursed.