Home Seller Closing Process: What to Expect on Closing Day

For a seller, closing day is the final step in the home seller closing process, and the conclusion of weeks of preparation, planning, and coordination between you, your real estate agent, and your escrow officer. From listing your home and preparing it for showings to negotiating and accepting an offer, selling a home involves many moving parts. Closing day brings everything together, marking the day when ownership of your home officially transfers to the buyer.

The Closing Process for Home Sellers

Closing day is usually much less stressful than people expect. After all the hard work, such as showing your home, finding a buyer, negotiating the sale price, managing home inspections and repairs, and the final walkthrough, has already been completed.

Officially, the closing process is the fulfillment of all the terms agreed upon between the seller and the buyer during the home-selling process, as defined in the purchasing agreement. On closing day, the seller transfers ownership of the property to the buyer, pays off their mortgage, pays all the parties who provided services to assist with the sale (real estate agents, title company, and more), and receives their proceeds from the sale.

What to Bring on Closing Day

In the past, real estate closings happened around a large table in your real estate agent’s office. Nowadays, however, it’s common to sign closing documents digitally from the comfort of anywhere.

Alternatively, your escrow officer may choose to use a mobile notary, who will meet you at a physical location to have you sign your documents there. This often happens when multiple sellers, due to busy schedules or different locations, cannot meet at the same time and place. Whether you sign with your agent alongside you or with a notary, you’ll need a government-issued ID, such as a driver’s license, to establish your identity.

Your Closing Documents

One of the most important documents you’ll receive is the final settlement statement, sometimes called a closing statement. It outlines your seller closing costs, and typically includes:

• The final sale price
• Your remaining mortgage payoff amount and any other loan payoffs (for example, a bridge loan)
• Real estate commissions to your agent and your buyer’s agent
• Escrow fees
• Prorated property taxes and other prorated expenses
• Any credits or concessions agreed upon during negotiations
• The amount of money you’ll receive from the sale
• Title insurance and related title charges

Review all of these numbers carefully. Your escrow officer or real estate agent can explain any fees or charges that seem unclear.

Documents You’ll Sign

What documents do sellers sign at closing? You’ll sign the documents needed to transfer ownership of the property and finalize the sale. These may include the deed, settlement documents, affidavits, and other transaction-related paperwork. Depending on your particular situation, you may have other documents to sign in addition to those listed below, but the most common include:

• Transfer of ownership
• Closing disclosures and settlement statements
• Legal disclosures
• Payoff authorizations
• Wire transfer instructions

Again, your escrow officer or real estate agent can guide you through the signing process and explain what each document means. Be sure to ask questions if there’s something you don’t understand.

Your Mortgage Payoff

If you still owe money on your home loan, closing day is when those funds are paid directly to your mortgage lender. You don’t send the payment yourself. The payoff amount includes the remaining principal balance, along with any accrued interest and fees required to completely satisfy your loan. Once the transaction closes, your mortgage lender will process the payoff and report the loan as paid in full. Be sure to keep copies of this transaction for your records as proof that your mortgage was indeed completely paid off.

Getting Paid

When will you receive your proceeds from the sale? In most cases, funds are sent by wire transfer shortly after the transaction is officially recorded with the county. Some sellers receive their proceeds the same day, while others may get their money the following business day or sometimes two days after closing. It depends on the time of day when the wire transfer is initiated.

Pro tip: Wire fraud is increasingly on the rise. Never give your wire transfer information via email. Only verify your wire transfer instructions directly with your escrow officer or closing company, either in person or via phone. If your title company reaches out to verify your wire transfer instructions, make sure that person is truly from the title company before giving out any information.

Hold Onto Your Copies

After the sale is complete, you’ll receive your signed paperwork either via email from your escrow officer (typically through a secure portal) or by mail. Be sure to keep your paperwork in a safe spot. Particularly, save copies of:

• The final settlement statement (you’ll need it for your taxes)
• Mortgage payoff documents
• Closing disclosures
• Receipts for repairs or improvements you made to your home over the years (you’ll need these for your taxes)

Handing Over the Keys

If you’re meeting with your real estate agent at their office to sign your documents, you may be asked to bring things related to your property that rightfully will belong to the buyers once ownership changes hands. These include:

• House keys
• Garage remotes
• Mailbox keys
• Security system codes
• Passcodes for smart home devices
• Manuals for home systems and appliances
• Copies of home repair records if you made permitted remodels (you’ll need to keep the originals for your taxes)

Be sure to round up these items before your closing to avoid spending time searching for them at the last minute.

Pro tip: If you’re signing closing documents digitally or with a mobile notary, be sure to follow up with your real estate agent or escrow officer about the best way to transfer the property items listed above to the new owners.

The Finish Line

Most closings are straightforward, and your real estate agent and escrow officer will provide clarification on any documents or terms you don’t understand. The buyer will also have a set of documents to review and sign. Once both parties have completed the necessary paperwork and the transaction is complete, the home is ready for its new owner.

What can a homebuyer expect in the closing process? View our buyer’s closing day guide.

Consider Seller’s Home Warranty Coverage

When you’re in the process of selling your home, a seller’s home warranty can come in particularly handy. It covers many essential household appliances and systems, providing a budget-friendly way to manage unexpected repairs or replacements when they break due to normal wear and tear during the listing period. Seller’s coverage may also help cover issues revealed during your home inspection, providing buyers with reassurance and helping transactions stay on track.

If you have a seller’s home warranty, closing day is the time the buyer’s agent will remove your name from the home warranty contract and update it with the buyer’s contact information so they can continue coverage. By helping protect covered appliances and systems after closing, continued coverage can provide many benefits for buyers and added peace of mind for sellers.

Learn more about a seller’s home warranty and how to order one when selling your home.

Already own your home? Discover the many benefits of home warranty coverage for homeowners.

FAQs About Closing for Home Sellers

What does a seller need to bring to closing?

Usually, sellers need to bring a valid government-issued photo ID to closing. Your escrow officer will let you know in advance if any additional documentation or information is needed.

How long does a closing take for a seller?

While every transaction is different, most closing appointments take about an hour or less. However, it’s important not to rush through the process. You may have questions or want clarification about a particular document, so take the time to fully understand what you’re signing.

What documents do sellers sign at closing?

At closing, sellers review and sign the documents needed to finalize the sale and transfer ownership of the property. These documents may include legal disclosures, tax forms, and other paperwork related to the transaction. Your real estate agent and escrow officer will guide you through the various forms.

When does the seller receive money from the home sale?

Most transactions use wire transfers to distribute money. Depending on the time of day the wire transfer is initiated, a seller can expect to receive funds either on closing day or 1 to 3 days after.

Does a home warranty help when selling a house?

A home warranty can help protect sellers from costly repairs or replacements when covered home appliances and systems break due to normal wear and tear while the home is on the market. It can provide reassurance to both buyers and sellers and help transactions stay on course.

The contents of this article are provided for general guidance only. First American Home Warranty does not assume any responsibility for losses or damages as a result of using this information.