Closing is the last and final step in a real estate transaction, during which the seller receives the proceeds from the sale and the buyer becomes the legal owner of the property.
What to Expect at a Closing If You Are the Seller
A day or two before the closing, you should make sure that all the contingencies listed in the contract are fulfilled. For example, if you agreed to repair or replace something, you need to get it done at least two days before the day of closing.
The day before the date of closing, the buyer – along with their agent or real estate attorney – will do a final walkthrough and inspect the property to make sure it is exactly in the same condition as described in the contract.
On the day of closing, you need to sign a number of documents to transfer the ownership of your property to the buyer. These include the deed, the settlement statement, and the closing statement.
In addition to this, you will have to sign the following documents.
- A name affidavit in order to attest to your identity and prove that you are indeed who you claim to be.
- Tax and utility receipts.
- Proration agreements which specify the housing costs owed by both parties (you and the buyer). For example, if you are selling your property in March, but have already paid property taxes and homeowner association fees for the whole year, the buyer is required to reimburse you for 75% of the bills you paid.
Once you sign all the documents, you are required to hand over all the keys, devices that control various appliances, and the passwords to the security system to the buyer. At the end of the closing process, you will receive the proceeds from the sale of your property.
What to Expect at a Closing If You Are a Buyer
A day before the closing, you need to do a final walkthrough to make sure that all the contingencies listed in the contract are met. You need to check if the property is clean, all the doors and windows are intact, all the repairs and replacements have been made as stipulated in the contract, and if all the mechanical and electrical appliances are in proper working condition.
The importance of a home inspection cannot be overstated, especially in Alabama, where real estate transactions are governed by the ‘caveat emptor’ doctrine.
The doctrine states that sellers in Alabama are not legally required to disclose all the details about the condition of their property. So, it is up to you – the buyer – to inspect the property carefully and find out if there are any cosmetic or structural defects that need to be repaired before you can move in.
On the day of closing, you need to sign a number of documents including the deed, bill of sale, truth in lending statement, mortgage agreement and note, monthly payment letter, and transfer tax declaration.
You will also have to pay the closing costs and a number of other fees. The mode of payment can be a cashier’s check or a wire transfer, depending on the preferences of all the parties involved.
What If the Seller Is Unable to Move Out Before the Closing Date?
Generally, the seller is required to move out of the property a few days before the closing date, as specified in the contract. If they are unable to do so for any reason, they can negotiate with the buyer and enter into what is called post-closing possession agreement.
Under the agreement, the seller can live in the property for a short period of time – which can range from a few days to a few weeks – in exchange for a daily or weekly rent. At the end of the term, the seller is required to move out. Not all buyers, however, might agree to this kind of an arrangement.
Why You Need a Real Estate Attorney by Your Side
Whether you are a buyer or a seller, it is essential for you to have an experienced real estate attorney by your side during the closing process. Under Alabama law, all the documents needed for a real estate transaction must be drafted, prepared, and reviewed only by a real estate attorney who is licensed to practice law in the state.
Moreover, an attorney can negotiate and re-negotiate with the other party on your behalf, assist you with the pre-sale home inspection, make sure the other party does not make any unreasonable demands, and also make sure that your rights and interests are not violated or transgressed upon by any party at any time during the transaction.
Qualified Real Estate Attorneys in Alabama
The experienced real estate attorneys at Davis, Bingham, Hudson, & Buckner P.C. have decades of experience in handling residential and commercial real estate transactions. We can skillfully guide you through the process of buying, selling, renting, and leasing real estate properties and ensure that your rights and interests are protected at each step.
You can contact our real estate attorneys at 334-821-1908 for a free consultation.