The Process of Closing on a House for a Seller

The Process of Closing on a House for a Seller

The Process of Closing on a House for a Seller

As a homeowner in Pennsylvania, deciding to sell your property is not a decision made lightly. After the decision has been made, you will embark on a journey which culminates in the closing process. The closing process, also known as settlement, is the final step in a real estate transaction. It involves numerous steps, parties, and legal documents that need to be understood and handled correctly. This guide is designed to help you navigate the closing process effectively. From understanding what happens at a house closing, the steps leading up to it, and what you, as a seller, need to bring to the closing, we’ve got you covered. Our aim is to demystify the process and ensure you are well-equipped for this final stage in selling your home.

What Happens at a House Closing for Seller

At a house closing, the seller meets with the buyer, their respective legal representatives, and often a representative from the title company. This is the moment when the property officially changes hands. The buyer pays the purchase price, usually through a combination of personal funds and a mortgage loan. As a seller, you’ll receive the proceeds of the sale, less any outstanding mortgage balance and closing costs. This is a pivotal moment in the property transaction process, and it’s crucial to understand the important facets of it – the documents that come into play, the role of various parties, and the costs involved. Let’s delve into each of these aspects in detail.

Signing the Purchase Offer

The journey towards the closing table begins with the signing of the purchase offer. In Pennsylvania, it’s common practice for the buyer to make a written offer to buy your property. This document, known as the purchase offer or sales agreement, outlines the proposed terms and conditions of the sale. It includes details such as the purchase price, any contingencies (like mortgage or inspection), and the proposed date of closing.

As a seller, you have the right to accept, reject, or counter this offer. If you choose to accept the offer, both parties will sign the purchase offer, making it a legally binding contract. This agreement is the foundation of the property transaction and sets the stage for the closing process.

It’s vital to understand every clause in the purchase offer before signing it, and you may want to consult with a real estate attorney or real estate professional to clarify any doubts.

Escrow and Hiring Real Estate Attorneys

Once the purchase offer is signed, the process moves into the escrow phase. During this period, a neutral third party, known as an escrow agent, holds onto the agreed-upon funds, usually a deposit made by the buyer, along with the signed purchase offer. The escrow agent ensures that all the conditions laid out in the purchase offer are met before the funds are released and the property changes hands. Escrow provides a layer of protection for both parties, ensuring the buyer doesn’t lose their money if the deal falls through, and the seller doesn’t lose their property without payment.

The escrow process can be complex, and it’s at this point that you may want to consider hiring a real estate attorney. In Pennsylvania, while not legally required, having a real estate attorney can greatly ease the closing process. They’ll help you understand the legal jargon, navigate negotiations, and ensure all required documents are correctly handled. Remember, the goal is to ensure a smooth and fair transaction. An attorney can provide invaluable advice and oversight, making sure you’re protected every step of the way. Your attorney, along with your real estate professional, will be your main source of advice and guidance throughout the closing process.

Titles and Insurance

In the context of real estate, a title is a legal term that denotes ownership of property. Before the closing process can proceed, it’s essential to ensure that the title of the property is free from any claims or liens that might hinder the transaction. This is where a title search comes into play. A title company or an attorney usually performs this detailed examination of public records to confirm the seller’s legal right to transfer ownership and to uncover any issues or ‘clouds’ that could affect the title.

Title insurance is a policy that protects the buyer and the lender from any future claims against the property. There are two types of title insurance: Lender’s policy and Owner’s policy. The Lender’s policy protects the mortgage lender up to the loan amount, and the Owner’s policy protects the buyer’s financial investment in the property. In Pennsylvania, it’s typical for the buyer to pay for the lender’s title insurance, while the cost of the owner’s title insurance often falls upon negotiation between the buyer and seller.

While title searches are thorough, they may not catch every potential issue, and title problems might arise during the closing process. Some common title problems include unknown liens, public record errors, and undisclosed heirs claiming ownership of the property. If such a situation arises, it’s crucial to address it promptly to prevent delays or cancelation of the sale.

Your real estate attorney and title company are crucial allies in resolving these issues. They’ll work together to identify the problem’s source, guide you on the next steps, and even negotiate with claimants if needed. In many cases, title problems are resolved by clearing the lien, rectifying record errors, or settling with the claimant.

Bear in mind that title insurance offers protection against future claims but doesn’t cover any known defects identified during the title search. Hence, it’s paramount to resolve any title issues before closing.

Inspections and Negotiations

After ensuring the title is clear, the next important step in the closing process is the property inspection. This involves a professional inspector examining the home for any potential issues, including structural defects, safety hazards, or damage that could affect the home’s value. The inspection typically covers the home’s foundation, roof, plumbing, heating and cooling systems, electrical systems, and other key areas. The inspector will provide a detailed report outlining any problems found, including recommended repairs or improvements.

In Pennsylvania, the buyer usually arranges and pays for the inspection. Once the buyer receives the inspection report, they may wish to negotiate the terms of the contract, especially if significant issues are discovered. This could involve asking the seller to make necessary repairs, reduce the selling price, or offer a cash credit at closing to cover the cost of repairs. Remember, as a seller, you can negotiate, accept, or decline these requests.

If both parties can’t agree on terms following the inspection, the buyer may have the option to pull out of the deal, depending on the contingencies outlined in the purchase offer. Thus, it’s essential to approach these negotiations with an open mind and a willingness to compromise to keep the sale on track.

Your real estate attorney and professional can guide you through these negotiations, ensuring you understand your options and helping you make decisions that protect your interests. Their expertise will be invaluable in navigating this often complex and critical phase of the closing process.

Lastly, remember to keep all documentation related to the inspection and any subsequent negotiations. This will be essential proof of agreement and may need to be presented at the closing meeting.

If you’re concerned your home would fail an inspection or have several costly repairs to address you can always sell your house for cash in Philadelphia. Cash home buyers purchase homes in as-is condition and handle all the repairs required, saving you time and money. Keep in mind that cash buyers typically offer lower prices than a traditional sale, but it can be an attractive option if you want to avoid inspections or long closing processes.

Getting an Appraisal

The next major step in the property closing process is obtaining an appraisal. An appraisal is a professional estimate of a property’s market value conducted by a licensed appraiser. In Pennsylvania, the buyer’s mortgage lender typically orders the appraisal as part of the loan approval process to ensure the property is worth the loan amount.

The appraiser will evaluate the property’s size, condition, function, and quality. They’ll also consider factors like the location of the property, any improvements made, and recent sales of comparable properties in the neighborhood. Upon thorough evaluation, the appraiser will compile a detailed report specifying the property’s estimated market value.

If the appraisal comes in lower than the sales price, it can create complications in the sale process. The lender may not be willing to lend more than the appraised value, which could lead to the buyer renegotiating the price, providing a larger down payment, or, in some cases, walking away from the deal. As a seller, you have the right to challenge a low appraisal if you believe it’s inaccurate. You can provide additional information about recent, comparable sales in your area or any improvements made to the property that the appraiser might not have considered.

Maintaining open communication with your real estate attorney and professional during this phase is crucial. They can provide guidance and help navigate any issues arising from the appraisal, keeping the closing process on track. Again, any documentation related to the appraisal should be retained as it may need to be presented at the closing meeting.

Finalizing the Sale and Understanding Closing Costs

The final stage of the home selling process is the closing, also known as the settlement. This is when the property officially transfers from the seller to the buyer. In Pennsylvania, closings are usually conducted by a title company or a real estate attorney.

As the seller, you need to bring all necessary documentation, including the original property deed, property tax receipts, and proof of any repairs or inspections completed. Make sure to carry your government-issued identification card as well.

The closing process involves signing a series of legal documents. These include the deed, which transfers the property’s ownership from you to the buyer, and the bill of sale, confirming the transaction’s details. Additionally, you and the buyer will review and sign the settlement statement, which itemizes the financial transactions undertaken by both parties. Keep copies of all these documents for future reference.

At the closing, the buyer typically pays the purchase price, less the earnest money deposit they’ve already provided, and any amount they’re financing. As the seller, you will receive the proceeds from the sale, less your mortgage balance and closing costs.

Closing costs for sellers in Pennsylvania typically range from 1% to 3% of the sale price. These costs generally include a commission for both the buyer’s and seller’s real estate agents, which is usually 5% to 6% of the sale price, split between the two agents. Other costs include prorated property taxes, transfer taxes, and any agreed-upon buyer credits. Your real estate attorney or professional can provide you with a detailed breakdown of these costs ahead of the closing, so you know exactly what to expect.

The closing process represents the culmination of your home-selling journey. While it can seem complex, remember that your real estate attorney and professional are there to guide you every step of the way, ensuring a smooth and efficient process.

After the closing is complete, and all funds have been exchanged, the buyer officially takes ownership of the property. You will then hand over the keys, thus marking the end of your role as the seller.

Helpful Tip: Closing costs can add up and realtor commissions can be costly. To save costs, you might want to consider simply selling your house for cash in Philadelphia and skipping the realtor altogether. There are a few most trusted house-buying companies in Philadelphia such as Problem Property Pals that can buy your house fast in as-is condition and save you the cost of cleaning, repairs, and realtor commissions.

Finalizing the Sale and Understanding Closing Costs


The home selling process is a complex process, no doubt, but by properly understanding all the steps involved and having a knowledgeable professional to assist you along the way, it doesn’t have to be daunting. With the right preparations, information, and support system in place, you can ensure a smooth closing transition. With that said it’s also important to note that there is no one-size-fits-all approach when selling a house in Pennsylvania. Every transaction is different and requires its own unique set of considerations. However, by keeping the above steps in mind, you will be well on your way to a successful home sale.

If you need to sell your house fast in Philadelphia we’d love to help! We’re Problem Property Pals and we specialize in helping homeowners sell their houses fast without any hassle. We’ll buy your house for cash, as-is, so you don’t have to worry about making repairs or cleaning the property. Plus, you won’t have to pay realtor commissions! Contact us today to learn more about our services and get an offer on your house within 48 hours!

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now...

We buy houses in ANY CONDITION. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call (267) 244-9163...
  • I consent to receive recurring emails, text messages and calls with marketing offers and other information about my property, including possibly using automated technology. Message & data rates may apply. You may opt-out at any time. Consent is not a condition of purchase.

  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *

Call Us Call Us!