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Preparing for
Contract Settlement
As the
seller, you have relatively little to do at this point. The
bulk of the work between contract signing and closing falls
on the buyer, who must arrange for a home inspection, financing,
and homeowners and title insurance policies.
If you
agreed to have something repaired, do it now. If a problem
arises with the title, you could become involved with paperwork,
legal bills and delicate diplomacy. If a title problem is
so complicated it threatens to delay settlement, your buyer
may want to void the contract. Your attorney may be able to
smooth things over for a time, but if the deal seems headed
for the rocks you'll need to determine what your rights and
options are.
Here are
some of the common last-minute glitches that can be avoided
at settlement by being prepared.
- Keep
abreast of progress on both sides. If your buyer is having
trouble getting a loan on the terms specified in the contract,
you should know it; if she is turned down, it could jeopardize
the whole deal. A day or so before closing, make sure all
the necessary papers and documents have been gathered and
are in the hands of the right players.
- At
this stage, everything should have been spelled out in the
contract. Your agent should have kept you up to date on
what you should expect to net from the transaction. You
should have received an estimated-net sheet when you signed
the listing agreement, and another along with each contract
presentation. Prior to settlement, the escrow officer or
settlement attorney should have provided you with a copy
of the settlement sheet. If you are handling your own settlement,
you can get an estimate at the time you arrange for closing,
or "open escrow," whether it is with a title or
abstract company or an abstract attorney.
- People
who should be present at closing need to be kept informed
of any change in the date, time or place. They should be
reminded a week before closing, and again the day before.
- Anyone
named on the deed under which you hold title must sign the
new deed by which you grant title. In many jurisdictions,
if you have married since acquiring title, your spouse also
will have to sign the deed. If a co-owner doesn't live nearby,
allow time to have the deed signed and returned before settlement.
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You should know when you will be paid.
Don't expect to walk away from the settlement table with
a check in hand, but don't leave the question of when and
how you will be paid undetermined. Most settlement attorneys
do not disburse checks until all the necessary documents
have been recorded. If that's the procedure, when will the
recording take place, and how often are checks made up?
If you are buying another property,
consider having both settlements at the same office, scheduled
back-to-back. That way, the timing of the disbursement is
not a problem. You sign a paper authorizing the title company
or attorney to assign the funds from your sale to your purchase.
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