Who Signs First at Closing: Buyer or Seller?

Key Highlights

• The closing process for buyers and sellers is different, with buyers typically signing more documents.
• Sellers need to bring keys, codes, and garage door openers to closing.
• Buyers and sellers both need to bring necessary identification to closing.
• Sellers may need to bring final utility bills and of repairs to closing.
• Buyers should a cashier’s check for closing costs and any required documents for their mortgage lender.
• The seller doesn’t necessarily need to be present at closing, but someone with power of attorney can sign on their behalf.

Closing day is an important milestone in the real estate transaction process. It’s the day when ownership of a property officially transfers from the seller to the buyer. However, there may be some confusion about who signs first at closing: the buyer or the seller. The answer to this question depends on various factors, including the state and the specific circumstances of the transaction. In this blog, we will explore the closing process for buyers and sellers, the documents they need to bring to closing, and whether or not the seller needs to be present at closing. By understanding the closing process, both buyers and sellers can be better prepared for this important step in buying or selling a home.

The Closing Process Explained

The closing process is the final step in a real estate transaction, where the buyer and seller complete the necessary paperwork and financial transactions to transfer ownership of a property. It typically takes place on the agreed-upon closing date, which is specified in the purchase agreement.

During the closing process, the buyer and seller sign a variety of documents, including the deed, mortgage documents, and other legal paperwork. They also exchange funds, such as the purchase price, closing costs, and any other agreed-upon payments.

The closing day is often referred to as the “closing date” and is an important milestone in the real estate transaction process. It is the day when the buyer takes possession of the property and the seller receives the proceeds from the sale.

The closing process can be complex and time-consuming, involving multiple parties such as the buyer, seller, real estate agents, mortgage lenders, and title companies. Each party has specific responsibilities and must complete certain tasks to ensure a smooth closing.

Key Steps in the Closing Process for Buyers and Sellers

For buyers, the key steps in the closing process include securing financing from a mortgage lender, conducting a home inspection, and obtaining homeowner’s insurance. They also need to review and sign various closing documents, such as the loan documents and the closing disclosure.

Sellers, on the other hand, need to prepare the property for closing by completing any agreed-upon repairs and cleaning the home. They also need to gather and provide necessary documents, such as the title insurance policy, statement of adjustments, and any other legal documents required by their jurisdiction.

Both buyers and sellers should review all closing documents carefully and seek clarification from their real estate agents or attorneys if they have any questions or concerns. It’s important to understand the terms and conditions of the sale before signing the closing documents.

Timeline of Closing Activities: Who Signs When?

The timeline of closing activities can vary depending on the specific details of the real estate transaction and the state in which it takes place. However, in general, the following is a typical timeline of closing activities for buyers and sellers:

It’s important for both buyers and sellers to work closely with their real estate agents and/or attorneys to ensure they understand the timeline of closing activities and meet all necessary deadlines. This will help ensure a smooth and successful closing process.

Preparing for Closing: A Guide for Sellers

Preparing for closing as a seller involves several important steps. First, you need to gather all necessary documents, such as the deed, title insurance policy, and statement of adjustments. You should also complete any agreed-upon repairs and clean the property before closing. It’s important to review the purchase agreement and ensure you understand your responsibilities as a seller. Finally, make sure you have all necessary identification and keys to the property. By taking these steps, you can be well-prepared for a smooth closing process.

Documents Sellers Need to Prepare Before Closing

As a seller, there are several documents you need to prepare before closing. These documents ensure a smooth and successful transfer of ownership. Some of the key documents sellers need to prepare include:

• Deed: The deed is the legal document that transfers ownership of the property from the seller to the buyer. It is an essential document in the closing process.
• Title insurance: Sellers typically need to provide a title insurance policy to the buyer. This policy protects the buyer against any future claims or disputes regarding the property’s ownership.
• Statement of adjustments: This document outlines the financial adjustments that need to be made between the buyer and seller at closing. It includes items such as property taxes and utility bills.
• Property taxes: Sellers need to provide proof that property taxes have been paid up to the closing date. This ensures that the buyer is not responsible for any unpaid taxes.

By preparing these documents in advance, sellers can help facilitate a smooth closing process and ensure all necessary paperwork is in order.

Seller’s Responsibilities on Closing Day

On closing day, sellers have several responsibilities to fulfill. First, they need to sign the necessary transfer documents, including the deed, to transfer ownership of the property to the buyer. Sellers may choose to have a real estate lawyer present to assist with the closing process and ensure all legal requirements are met.

Sellers are also responsible for paying any outstanding closing costs, such as real estate commissions and transfer taxes. These costs are typically deducted from the proceeds of the sale. It’s important for sellers to review the closing statement carefully to ensure all costs are accurate and accounted for.

By fulfilling these responsibilities, sellers can help ensure a successful closing and a smooth transfer of ownership to the buyer.

Preparing for Closing: A Guide for Buyers

Preparing for closing as a buyer involves several important steps. First, you need to secure financing from a mortgage lender and obtain a mortgage pre-approval. You should also conduct a home inspection and review the closing disclosure carefully to understand all costs associated with the purchase. Additionally, you need to gather all necessary documents, such as identification, proof of income, and bank statements. By taking these steps, you can be well-prepared for a smooth closing process and ensure a successful purchase of your new home.

Critical Documents Buyers Should Bring to Closing

When attending closing, buyers should bring several critical documents to ensure a smooth transaction. These documents typically include:

• Mortgage loan documents: Buyers need to bring any loan documents provided by their mortgage lender. These documents outline the terms of the loan and the buyer’s financial responsibilities.
• Insurance documents: Buyers need to provide proof of homeowner’s insurance coverage for the property. This protects both the buyer and the lender in case of any damage or loss.
• Title search documents: Buyers should bring any documents related to the title search, which verifies the property’s ownership and ensures there are no existing liens or claims on the property.

By bringing these critical documents to closing, buyers can help facilitate a smooth transaction and ensure all necessary paperwork is in order.

Buyer’s Checklist for a Smooth Closing Day

• Gather all necessary documents, including identification, loan documents, and insurance documents.
• Review the closing disclosure carefully to understand all costs associated with the purchase.
• Conduct a final walkthrough of the property to ensure it is in the agreed-upon condition.
• Bring a cashier’s check for closing costs and any other required payments.
• Ensure financing is in place and all necessary approvals have been obtained.
• Coordinate with your real estate agent and/or attorney to address any last-minute issues or concerns.

Understanding Closing Documents

Closing documents play a crucial role in the real estate closing process. These documents outline the terms and conditions of the sale and facilitate the transfer of ownership from the seller to the buyer. Some key closing documents include:

• Deed: The deed is the legal document that transfers ownership of the property from the seller to the buyer. It is recorded with the appropriate government agency to establish the buyer’s legal ownership.
• Mortgage documents: If the buyer is obtaining financing for the purchase, they will need to sign various mortgage documents, including the promissory note and the mortgage agreement. These documents outline the terms of the loan and the buyer’s responsibilities as a borrower.
• Title documents: Title documents, such as the title insurance policy and the title search report, ensure that the buyer is receiving clear title to the property. These documents provide protection against any future claims or disputes regarding ownership.
• Closing statement: The closing statement details the financial aspects of the transaction, including the purchase price, closing costs, and any other financial adjustments. It provides a breakdown of all the costs associated with the purchase.

These documents are typically prepared by the title company, escrow company, or attorney handling the closing. Buyers should carefully review all closing documents and seek clarification from their real estate agent or attorney if they have any questions or concerns.

Essential Documents in the Closing Process

Several essential documents play a crucial role in the closing process. These documents ensure all aspects of the sale are properly documented and facilitate the transfer of ownership. Some key documents include:

• Purchase agreement: The purchase agreement outlines the terms and conditions of the sale, including the sale price, contingencies, and closing date. It serves as the legal contract between the buyer and seller.
• Loan documents: If the buyer is obtaining financing for the purchase, they will need to sign various loan documents, such as the promissory note and the mortgage agreement. These documents outline the terms of the loan and the buyer’s responsibilities as a borrower.
• Closing disclosure: The closing disclosure provides a detailed breakdown of the financial aspects of the transaction, including the sale price, closing costs, and any other fees or adjustments. It ensures that the buyer is fully informed about the costs associated with the purchase.

By carefully reviewing and signing these essential documents, buyers can ensure a smooth and successful closing process.

Who Signs What? Breaking Down the Document Signatures

In a real estate closing, various parties are involved in signing different documents. Here’s a breakdown of who signs what:

• Buyer: The buyer typically signs documents such as the loan documents, the promissory note, the mortgage agreement, and the closing disclosure. They also sign the deed, which transfers ownership of the property to the buyer.
• Seller: The seller signs documents such as the deed, the title transfer documents, and the statement of adjustments. They may also need to sign additional documents, depending on the specific requirements of their jurisdiction.
• Notary: A notary may be present to witness the signing of certain documents and verify the identity of the parties involved. They typically notarize the deed and other important legal documents.

The specific documents that need to be signed can vary depending on the jurisdiction and the specific details of the transaction. It’s important for buyers and sellers to review all documents carefully and seek legal advice if needed to ensure that all necessary signatures are obtained.

The Role of Real Estate Agents and Attorneys at Closing

Real estate agents and attorneys play crucial roles in the closing process. They provide guidance and support to buyers and sellers, ensuring that all legal requirements are met and the transaction proceeds smoothly.

Real estate agents assist buyers and sellers throughout the entire real estate transaction, including the closing process. They help coordinate communication between all parties involved, review all documents, and ensure that all necessary steps are taken leading up to closing.

Real estate lawyers also play a vital role in the closing process. They provide legal advice, review all closing documents, and ensure that the transaction complies with all applicable laws and regulations. They can also represent their clients’ interests and negotiate on their behalf during the closing process.

Both real estate agents and attorneys may charge legal fees for their services. These fees vary depending on the complexity of the transaction and the specific services provided. It’s important for buyers and sellers to discuss and understand any legal fees with their respective agents or attorneys before entering into a real estate transaction.

By working with experienced professionals, buyers and sellers can navigate the closing process with confidence and ensure a successful transaction.

How Agents and Attorneys Facilitate the Closing Process

The closing process for a real estate transaction involves various legalities and documentation. Real estate agents and attorneys play a crucial role in facilitating this process. They ensure that all necessary legal documents are prepared accurately and in compliance with state laws. They also coordinate with the title company or escrow company to ensure a smooth closing process.

Real estate agents assist buyers and sellers by guiding them through the closing process, explaining the purpose and significance of each document, and answering any questions they may have. They help ensure that the title is clear and free of any liens or encumbrances. Attorneys review all legal documents, such as the purchase agreement and closing documents, to ensure that the transaction is legally sound and protects the interests of their clients. They also verify that the title is clear and that the property is being transferred legally.

During the closing process, agents and attorneys work together to ensure that all necessary documents are signed and executed correctly, that the funds are disbursed appropriately, and that the transfer of ownership is completed without any issues or complications. By having experienced professionals involved in the closing process, buyers and sellers can have peace of mind knowing that their interests are protected and that the transaction is being handled legally and ethically.

Legal Considerations: Ensuring a Legally Sound Closing

When it comes to closing a real estate transaction, there are several legal considerations that need to be addressed to ensure a legally sound closing. One of these considerations is the use of a power of attorney. A power of attorney is a legal document that allows one person to act on behalf of another person in legal matters, including signing closing documents. This can be beneficial if the buyer or seller is unable to attend the closing in person.

Another important legal consideration is verifying the ownership of the property. Before the closing, the seller must provide proof that they are the rightful owner of the property and have the authority to sell it. This is typically done through a title search, which ensures that there are no liens or other legal issues that could affect the transfer of ownership.

Additionally, there are other legal considerations such as ensuring that all necessary legal documents are properly prepared and signed, and that any required disclosures are provided to the buyer. It is important to consult with a real estate attorney to ensure that all legal requirements are met and that the closing is legally sound.

Closing Costs: What Buyers and Sellers Need to Know

Closing costs are an essential part of the real estate transaction process and should be taken into account by both buyers and sellers. These costs include various fees and expenses associated with the closing of the deal. Buyers and sellers need to have a clear understanding of these costs to avoid any surprises and plan their finances accordingly.

For sellers, closing costs typically include real estate agent commissions, transfer taxes, and any outstanding fees or credits agreed upon in the purchase agreement. Real estate agent commissions are usually the largest expense for sellers, typically ranging from 5% to 6% of the sale price. Transfer taxes are fees imposed by the local government for transferring the property’s title from the seller to the buyer.

For buyers, closing costs can include mortgage application fees, appraisal fees, attorney fees, title insurance, and property taxes. These costs can vary depending on factors such as the purchase price, loan amount, and location. It is important for buyers to carefully review and understand all closing costs before finalizing the purchase.

It is worth noting that both buyers and sellers can negotiate who pays for certain closing costs as part of the negotiation process. This should be clearly stated in the purchase agreement to avoid any confusion or disputes later on.

Working with a knowledgeable real estate agent can help buyers and sellers navigate the closing costs and ensure that they are well-informed about the expenses involved in the transaction. Real estate agents have experience in dealing with closing costs and can provide guidance and advice on how to minimize costs and make the closing process as smooth as possible.

Overview of Closing Costs for Sellers

Closing costs for sellers can vary depending on factors such as the sale price of the property, the location, and any negotiated expenses. Some common closing costs for sellers include:

• Real estate agent commissions: Typically, sellers are responsible for paying the commission fees for both the listing agent and the buyer’s agent. This is usually a percentage of the sale price and can range from 5% to 6%.
• Transfer taxes: These are fees imposed by the local government for transferring the property’s title from the seller to the buyer. The amount of transfer taxes can vary depending on the location and the sale price of the property.
• Attorney fees: Sellers may choose to hire an attorney to review the closing documents and ensure a legally sound transaction. Attorney fees can vary depending on the complexity of the transaction and the attorney’s fees.
• Outstanding fees or credits: Sellers may be responsible for paying any outstanding fees or credits agreed upon in the purchase agreement, such as repairs or closing cost credits.

It is important for sellers to carefully review their estimated closing costs and consult with their real estate agent or attorney to ensure that they have a clear understanding of the expenses involved. By having a clear understanding of the closing costs, sellers can properly plan their finances and avoid any surprises at closing.

Overview of Closing Costs for Buyers

Closing costs for buyers typically include various fees and expenses associated with obtaining a mortgage and completing the real estate transaction. Some common closing costs for buyers include:

• Mortgage application fees: These are fees charged by the lender to process the mortgage application. They can include credit check fees, appraisal fees, and loan origination fees.
• Mortgage insurance: If the buyer is putting less than 20% down payment, they may be required to pay for mortgage insurance. This insurance protects the lender in case the buyer defaults on the loan.
• Title insurance: This insurance protects the buyer against any future issues with the property’s title, such as liens or claims that were not discovered during the title search.
• Attorney fees: Buyers may choose to hire an attorney to review the closing documents and ensure a legally sound transaction. Attorney fees can vary depending on the complexity of the transaction and the attorney’s fees.

It is important for buyers to carefully review their estimated closing costs and consult with their mortgage lender, real estate agent, or attorney to ensure that they have a clear understanding of the expenses involved. By having a clear understanding of the closing costs, buyers can properly plan their finances and avoid any surprises at closing.

Common Questions About Closing Day

On closing day, common questions may arise, such as potential delays in signing and the possibility of either party backing out. Delays can occur due to various reasons, including incomplete documentation or unexpected issues. If a party wants to back out at closing, legal implications surrounding the purchase agreement and financial penalties may apply. It’s crucial to clarify such situations with real estate agents, attorneys, or notaries present to ensure a smooth and legally sound closing process.

What Happens if There are Delays in Signing?

Delays in signing can occur on closing day for various reasons, such as document issues, financing delays, or last-minute complications. In such cases, the closing date may need to be rescheduled, and all parties involved, including the mortgage lender and escrow company, will need to be notified. It is important to address any delays promptly and work with all parties involved to ensure a smooth and successful closing.

Can Either Party Back Out at Closing?

Once all parties have signed the necessary legal documents at closing, it is generally difficult for either the buyer or the seller to back out of the real estate transaction. The sales contract and other legal documents bind both parties to the terms of the agreement. However, there may be certain circumstances, such as fraud or misrepresentation, that could allow either party to cancel the transaction. It is advisable to consult with a real estate attorney if there are concerns about backing out of a closing.

Frequently Asked Questions

Who Typically Signs First, Buyer or Seller?

The signing order at closing can vary depending on the state and the specific circumstances of the transaction. In some cases, the buyer may sign first, followed by the seller. In other cases, it may be the seller who signs first. The signing order is typically determined by the closing agent or attorney handling the transaction. It is important to follow the instructions given by the closing agent or attorney to ensure a smooth closing process.

What If I Cannot Attend the Closing Meeting?

If you cannot attend the closing meeting in person, you may appoint a power of attorney to represent you. A power of attorney is a legal document that authorizes someone to act on your behalf. Alternatively, you may be able to arrange for a mobile notary to come to your location and facilitate the signing of the necessary documents. Some closing companies also offer online portals where documents can be signed electronically. It is important to discuss these options with your real estate agent or attorney to determine the best course of action for your situation.