I Have a Buyer for My House. Now What?

Finding a buyer for your home is a significant step, but it also marks the beginning of a structured process to transfer ownership. This transition involves several crucial stages with specific procedures and responsibilities for both the buyer and seller. Understanding these steps will help navigate the path from a signed contract to the final transfer of keys.

Understanding the Purchase Agreement and Escrow

The purchase agreement is the foundational, legally binding contract between you and the buyer. This document outlines the transaction, detailing the purchase price, closing date, property description, financing terms, and contingencies. It protects both parties by defining their rights, obligations, and timelines.

After the purchase agreement is executed, an escrow account is opened with a neutral third-party, often an escrow or title company. Escrow holds all funds and documents until every condition in the purchase agreement is met. This impartial oversight ensures neither party can access funds or property documents before the sale’s terms are satisfied, providing a secure environment for the exchange.

The earnest money deposit, typically 1% to 3% of the purchase price, is submitted by the buyer shortly after signing the agreement. This deposit demonstrates the buyer’s commitment and is held in a secure, non-interest-bearing account. If the deal proceeds, it is usually applied towards the buyer’s down payment or closing costs.

If the transaction falls through, the earnest money’s disposition depends on the purchase agreement and the reason for the failed sale. If a buyer withdraws due to an unmet contingency (e.g., failed inspection, inability to secure financing), they are typically entitled to a refund. If the buyer defaults without a valid contingency, the earnest money may be forfeited to the seller. Escrow ensures correct distribution based on contractual terms.

Navigating Buyer Due Diligence and Contingencies

After the purchase agreement and escrow are established, the buyer enters a due diligence period to investigate the property. This phase is governed by contingencies in the purchase agreement, allowing the buyer to withdraw without penalty under specific conditions. These clauses enable buyers to assess risks or their ability to finance the purchase. Understanding these contingencies helps sellers anticipate and respond to buyer actions.

A common contingency is the home inspection. The buyer hires a professional inspector to evaluate the property’s condition, including structural integrity and mechanical systems. As the seller, you must provide reasonable access for this inspection, which typically occurs within 7 to 14 days of signing the agreement. The buyer receives a detailed report outlining identified defects.

Based on the inspection report, the buyer may request repairs, a credit towards closing costs, or a price reduction. You can agree, counter-offer, or decline. If no resolution is reached, the buyer typically has the right to terminate the agreement and receive their earnest money back. Flexibility from both sides is important during this negotiation.

The appraisal contingency protects the buyer’s lender by ensuring the property’s value supports the loan amount. An independent appraiser, chosen by the lender, assesses the home’s market value by comparing it to similar sold properties. Your role is to ensure the appraiser has access. If the appraisal meets or exceeds the purchase price, the loan process proceeds.

If the appraisal value is lower than the purchase price, the buyer’s lender will only finance up to the appraised value. Options to bridge this gap include the buyer paying the difference in cash, you reducing the sale price, or a negotiation where both parties contribute. If no agreement is reached, the appraisal contingency often allows the buyer to withdraw.

The financing contingency stipulates that the sale is contingent upon the buyer securing the necessary mortgage loan within a specified timeframe, usually 21 to 45 days. While your direct involvement is limited, you may need to provide property-related documents to the lender, such as tax statements or HOA documents. This contingency ensures the buyer’s financial capacity; if loan approval is not obtained, they can typically exit the contract without penalty.

Sellers are legally obligated to provide disclosures about the property’s condition. These inform the buyer of known material defects, environmental hazards, or other significant issues that could affect value or desirability, such as lead-based paint or past water damage. Providing accurate disclosures protects you from potential legal challenges after the sale.

Seller Responsibilities Before Closing

As the closing date approaches, you have several responsibilities to ensure a smooth transition. Completing any agreed-upon repairs is paramount. Keep detailed records, such as invoices, as the buyer may request proof. Addressing these promptly avoids last-minute complications.

Coordinate the final walk-through with the buyer, typically one to three days before closing. This allows the buyer to inspect the property one last time, confirming its agreed-upon condition and that all negotiated repairs are complete. The property should be free of debris and personal items, left in a “broom-clean” state.

Vacate the property entirely, removing all personal belongings from the home, garage, attic, and sheds. Remember that fixtures or items explicitly included in the sale, such as built-in appliances, must remain. Careful planning helps avoid issues during the final inspection.

Arrange for the transfer or disconnection of utilities. Contact service providers for electricity, gas, water, and trash to terminate services in your name, effective on the closing date. The buyer will initiate new services. This prevents service interruptions for new owners and ensures you are not billed after ownership transfers.

Gather all necessary property-related documents to expedite closing. This may include your original deed, survey records, home warranty information, or HOA documents if requested. Be prepared with details for the payoff of any existing mortgages or liens, as these will be settled through escrow from the sale proceeds.

Finalizing the Sale

The closing appointment is the culmination of the home selling process, where ownership legally transfers to the buyer. This can occur in person at a title or escrow office, or remotely. As the seller, your presence is primarily required to sign the remaining legal documents, which are typically fewer than the buyer’s.

During closing, you will sign the deed, which formally conveys ownership to the buyer. You will also sign a Closing Disclosure (CD), a standardized form detailing all costs and credits, including the final sale price, prorated property taxes, and closing costs. Review this document carefully to ensure accuracy.

The transfer of funds is central to closing. The buyer’s funds, including their down payment and mortgage loan proceeds, are wired to the escrow account. The escrow officer disburses funds according to the Closing Disclosure, paying off existing mortgages or liens, settling real estate commissions, and covering closing costs like title insurance premiums and transfer taxes.

After documents are signed and funds disbursed, the deed is sent to the county recorder’s office for official recording. This registers the change of ownership in public records, making the transfer legally complete. The property is legally transferred once the deed is recorded.

The final action is the handover of keys and other access devices, such as garage door openers. This typically occurs immediately after the deed’s recording is confirmed, granting the buyer possession. This moment signifies the successful completion of your home sale.