- DUE DILIGENCE PERIOD -
Depending on the source of funding for the buyer, it could take several weeks before actually closing. This period is also commonly referred to as the "due diligence" period.
During this time, the buyer will be working with their lender and the title company to complete any outstanding items. The buyer will spend much of their time providing financial info for the mortgage, but there are additional requirements that need the attention of the seller.
The lender will require an appraisal and additional inspections like for wood destroying organisms (or WDO, the termite inspection).
The title company will likely require a survey to ensure accurate dimensions and acreage, and that none of your neighbors have encroached upon your property lines. The buyer usually covers these costs.
This means more people will be coming to your home. In order to make sure the process goes smoothly, be sure to keep your home accessible, in good shape, and respond to their requests as quickly as possible. Also, utilities like power, water, and sewer must remain active.
KEEP THE HOME IN GOOD CONDITION
Some sellers reach this point and lose motivation for regular home maintenance (Why should I mow the grass if I’m moving soon?). However, the contract requires the home to be regularly maintained and there is a financial penalty if it isn't.
For example, say you stop maintaining the yard. The buyer can hire a lawn company to do this maintenance. The cost will be paid by the seller, plus a penalty fee of 50% of the cost.
Title company Florida Title & Guarantee Agency has a decent summary of what you'll see from the title company during the closing period. A pdf they created is linked below.
- CLOSING ITEMS -
These are items that will take place during the closing period. They will be paid by the seller, but the cost can be paid from the money you make on the home sale. No money will come out of the sellers' pocket unless the seller is underwater.
The title company will complete a title search on the property to make sure there are no liens and that it can legally be transferred.
MUNICIPAL LIEN SEARCH
This is separate from a title search, but is conducted by the title company. It is required in Broward and Dade county, but optional in all others.
It looks for things like back property taxes, code violations, unpaid special assessment fees, etc.
The seller pays for a owner’s title insurance policy as protection for the homebuyer in case a title problem arises in the future. It is issued for the sale price of the home.
Buyers taking out a mortgage will be required by the lender to purchase lender’s title insurance. This covers the lender up to the amount of the loan in the event that any problems arise with the home’s title after financing.
COST: Varies depending on the home price and mortgage amount. The cost is regulated by the State of Florida and is as follows:
This is a government tax on the sale of your home. It's nothing but a closing cost, but we've included it here so sellers will have an idea of their total costs.
Sellers pay a documentary stamp tax, which can be calculated from the equation below:
(Sale Price/$100) x .70 = Tax amount
Dade/Broward pay 0.60 instead of 0.70
- CLEAR TO CLOSE -
Once everything is completed, the lender will issue a final approval to the buyer. This is known as being “clear-to-close.”
BEFORE YOU CLOSE
There are a few things that are easy to overlook, but need your attention before you close, including:
Experts recommend planning for a move 6-8 weeks before actually moving. That means you should be looking into moving or truck rental companies not long after the offer was accepted.
Budget for moving costs. Even if your move is in-town, moving is expensive and time-consuming. A local move of less than 100 miles with two movers and a moving truck costs, on average, $80 to $100 per hour.
AVERAGE LOCAL MOVING COSTSThe average moving price for local moves is $25 per hour per mover. However, that price can be higher depending on your location within the country and time of the year (for example, summer, Friday's, and the end of the month tend to cost more).
Sellers MUST be out of the home by the closing date. The home must be move-in ready for the buyer.
The buyer will do a final walk-through shortly before closing. Leaving the home in a poor state can kill the deal or require the seller pay extra as a result.
The closing period