WHAT TO DO WHEN HOME SELLING
Usually the first thing done when home selling is to contact a Real Estate Agent and sign a listing agreement for the Agent to help you in the home selling process in exchange for a commission. Once a potential Buyer is found, your Real estate Agent will present you with a Real estate Contract containing an offer for the property, already signed by the Buyer. You can accept the offer as written, reject it completely, or make a counter-offer to the potential Buyer. Your Real estate Agent will be helpful in assisting you with these decisions, and it is a good idea to get an attorney to review the Contract before you finally sign it.
PREPARING FOR THE DAY OF CLOSING WHEN YOU ARE THE SELLER
After you have signed a Real estate Contract with the Buyer, you should immediately notify your attorney at Kane, Hartley & Kane, P.C, that you are selling your home. We will then begin to prepare for the closing. Your attorney, assisted by a paralegal will:
Prepare and draft the Warranty Deed by which you will be selling your home to the Buyer
Submit the Warranty Deed to the Buyer’s attorney for approval prior to the closing
Prepare necessary Conveyance Tax Returns required by the State of Connecticut and the town
Order payoff statements for any mortgages or liens covering your property
Calculate adjustments for prepaid items, such as real estate taxes and assessments, water and sewer use, and fuel oil
Deduct state and local transfer taxes, payoff amounts of your mortgage(s), as well as your attorney’s fees and Real Estate Agent commissions, from the proceeds you receive at closing.
Attend the closing with you to assure that everything goes as smoothly as possible in the home selling process.
A few days before the Closing, you will receive a detailed itemization of the various adjustments and disbursements that will be made at Closing, so that you will know the exact amount of money to expect at the Closing.
WHAT IS THE CLOSING?
The “Closing” is a meeting, usually held at the Buyer’s attorney’s office, where you deliver the deed to your property to the Buyer, in exchange for the sale proceeds. The Real Estate Agents, your attorney, and any mortgage loans being repaid are all paid out of the sale proceeds. At the Closing, your Real Estate attorney will be present to discuss any last minute issues and review and oversee the execution of documents and make arrangements for disbursements of the sale proceeds. It is the final step in the home selling process.
DO I HAVE TO ATTEND THE CLOSING?
It is usually expected that all parties attend the Closing so that any problems that may occur are appropriately addressed. It is not unusual for the sellers not to attend. As a seller, you may be selling your home and buying somewhere else. You can pre- sign the closing documents and give a power of attorney to the lawyer representing you.
WHAT ARE THE TYPICAL EXPENSES?
The largest expense when selling your home is usually a real estate broker’s fee which is usually 5% to 6% of the sales price. Rates cannot exceed 6% for residential closings, and are negotiable at the time a Seller enters into a listing agreement with a real estate agent. The Seller also has to pay a conveyance tax to the State of Connecticut equal to ½% (except when the property is worth more than $800,000.00 or when it is a commercial type of real estate). There is also a town tax of ¼%, although some towns are allowed to collect ½% as well.. Typically attorney’s fees range from $600.00 to $650.00. There will also be small recording fees.
At the Closing, you as Seller will be asked to sign a sworn statement to the effect that no one has a right to any mechanic’s liens upon the property (this would be someone who has provided construction materials or services to the property within the last 90 days and has not been paid in full). In this document, you also provide assurances that there are no tenants with rights to possession of the property, and you disclose any common driveway, boundary disputes, encroachments, and the existence of any other facts which may cause a title issue. The document also states that no improvements have been made to the home without obtaining any necessary permits. It is very important to disclose the existence of any such facts to your attorney as early in the process as possible, so that your attorney has time to attempt to remedy those issues prior to closing.
HOW DOES SELLING AND BUYING A HOUSE ON THE SAME DAY WORK?
Ideally, when doing a purchase and sale, you should be home selling in the morning and purchasing your new home with the proceeds from the sale later that same day. An attorney working with the client will make sure that this happens in this sequence, if possible. Typically, a Seller gives occupancy to the Buyer at the time of closing. However, in some instances, the Seller cannot give occupancy to the Buyer (because their new home may not be ready for them to move in to). Under those circumstances, a use and occupancy agreement is entered into between the Buyer and the Seller at time of closing whereby a set date is established for the Seller to move out of their new home while paying a per diem charge to the Buyer, typically based on the carrying charges of the Buyer. In a typical use and occupancy agreement, there is an escrow provided and a penalty provided in the event the Seller does not vacate the home at the agreed upon date.
Immediately after your closing, your attorney will send to your mortgage lender(s), by overnight courier, the required amounts to pay off any mortgage(s) that you had on your home. Following receipt of the funds, the mortgage lender(s) are required to provide a Release of Mortgage for each loan. Your attorney will be responsible to file the Release(s) of Mortgage on the land records for each loan upon receipt.