Understanding the Closing Process of Selling a Home in Indy
Selling a home can be a daunting process, but knowing what to expect when the time comes to close on the sale can help ensure that everything goes as smoothly as possible. Tracking down the right paperwork, process timelines, and understanding potential hiccups of the closing process can make a world of difference. This guide is designed to provide you with information about the closing process when selling a home in Indy, so you can get the best price for your house and start your new journey.
Before getting into the nitty-gritty details of the closing process, let’s review the timeline you can expect when you are selling a home in Indy. Generally speaking, it is expected that the sale takes between 30 and 90 days from listing to closing, depending on the complexities of the sale.
- Day 1: Listing your home and waiting for offers.
- Day 14: Accepting an offer and beginning negotiations and inspections.
- Day 21: Finalizing negotiations and sending over paperwork to closing attorney.
- Day 28: Buyer submits a loan application and mortgage company orders an appraisal.
- Day 35: Submission of title search and lien/judgment searches.
- Day 42: Submitting closing documents to buyers and attorneys for review.
- Day 49: Final walkthrough with the buyer and scheduling of closing date.
- Day 56: Closing and transferring of funds/keys, simultaneously with recordation of deed.
Understanding the Duties of Your Realtor
When it comes to selling your home, having an experienced realtor can make a huge difference. So, it’s important to understand exactly what duties and responsibilities they’re responsible for.
Your realtor will usually be responsible for finding qualified buyers, listing your property on the market, negotiating on your behalf, communicating with the other side, managing paperwork, and more. Here are some of the specific duties of your realtor when it comes to closing on your home sale:
- Provide an accurate estimate of the home’s current market value
- Help you obtain the necessary permits required by your local government
- Marketing your home and helping you find potential buyers
- Negotiating on your behalf and discussing any offers made
- Ensuring all paperwork is completed correctly and filing it with the county clerk
- Coordinating and scheduling inspections and repairs as needed
- Making sure the buyer meets all deadlines and handles their end of the transaction promptly
Your realtor is responsible for a lot of tasks and will likely do the majority of the work when it comes to closing on your home sale in Indy. It’s important to find an experienced realtor who you can trust so that everything goes as smoothly as possible.
Closing Costs & Disbursements
When selling a home in Indianapolis, there are a variety of closing costs and disbursements associated with the transaction. Generally, these costs come from the seller, the buyer or both. Some of the most common closing costs include home inspections, title insurance, loan origination fees, title search fees, attorney fees, property taxes, transfer taxes, and recording fees. It is important to know who pays for each of these costs and how they are distributed.
Home inspection costs are typically paid upfront by the buyer. This cost covers the services of an inspector who will inspect the property and look for any potential issues or hazards that could impact the home sale. Title insurance is an insurance policy that protects the homebuyer from any issues that may arise due to title defects. It is often split between the buyer and the seller, though sometimes it can be negotiated to one party. Loan origination fees are paid by the buyer to the lender to cover administrative costs associated with obtaining a mortgage loan. Title search fees are paid by the buyer to cover the cost of researching and verifying the legal title to the property. Attorney fees are usually paid by the buyer, though these fees can vary depending on the scope of the services provided.
Property taxes are typically paid by the seller until the deed is transferred to the buyer. Transfer taxes are imposed by the local government and must be paid by the seller, though the amount varies from state to state. Recording fees are charged by the county clerk and must be paid by the seller or buyer, depending on who is responsible for recording the deed. It is important to understand these costs and where they are coming from when selling a home in Indy.
Home Inspection – What to Expect and How it Impacts the Closing Process
When selling a home in Indy, you will likely require a home inspection. A home inspector will inspect the condition of the home to identify any existing problems that may not be visible to the naked eye. The home inspection usually covers all major systems like plumbing and heating, roof, and electrical systems. Additionally, the home inspector will check for any structural problems, pest infestations, and potential hazardous materials present in the home.
It’s important to understand that these inspections are not done to assess the value of the home, but rather to give the buyer peace of mind about the condition of the home they’re purchasing. If any issues are found, the buyer may ask the seller to address them before continuing with the purchase process.
The results of the home inspection can have a major impact on the closing process. Depending on the severity of any issues or damages found during the inspection, repairs or replacements may be necessary before the transaction can be finalized. In some cases, the buyer might even decide to turn down the offer due to the cost to address the issue. In this instance, it would be up to the seller to negotiate with the buyer, or consider renegotiating the sale price.
It’s always a good idea to find a trusted home inspector who can help guide you through the process and ensure that your home inspection goes as smoothly as possible.
Title & Adverse Possession
When selling your home, there are a few important things to know about title and adverse possession. Title is essentially a document that proves you have legal ownership over a particular piece of property. Title insurance protects both the buyer and seller in case of any issues or irregularities that may arise with the title to the property.
Adverse possession occurs when someone else takes possession of the property without the owner’s permission. That person has the right to use the land like they own it, and if they live there for a certain amount of time, they can take actual ownership. To protect yourself as the seller from any liability related to adverse possession, it’s important to do a title search to make sure that there are no other claims on the property before transferring the title.
The Closing Process & Timeline for Selling a Home in Indy
Selling a home can be the start of a new and exciting chapter in life, but the closing process often times can be daunting and confusing. It’s important to know what to expect ahead of time to make sure the process runs as smoothly as possible. Here is an overview of the closing process timeline when selling a home in Indy.
Step 1: Signing the Purchase Agreement
Once an offer is made and accepted by you and the potential buyer, both parties must sign off on a legally binding contract known as the Purchase Agreement. This should include contingencies to protect the seller against any unforeseen events during the closing process, including mortgage contingencies for the buyer, inspections, and appraisals.
Step 2: Home Inspection
The buyer will then arrange for a professional home inspector to come and inspect the property for any hidden problems or safety hazards that may compromise the value or usability of the property. Depending on the outcome of the inspection, the buyer may submit a request to the seller to make repairs or lower the purchase price.
Step 3: Appraisal
The appraisal of the property will be ordered by the buyer’s lender to determine if the property is worth the purchase price. The appraisal must come in at or above the purchase price before the loan is approved. You may need to negotiate a lower purchase price if the appraisal comes in lower than the asking price.
Step 4: Title Search
A title search of the property is required in order to verify legal ownership of the property and ensure that no liens are attached to it. This also provides proof that any former owners have since released their claim to the property. A title policy may be purchased to protect against any legal issues that arise after the sale.
Step 5: Closing Disclosure
A Closing Disclosure is a form mandated by the Consumer Financial Protection Bureau that lists all of the closing costs associated with buying and selling the home. This “good faith estimate” must be provided to the buyer three days before the closing date.
Step 6: Closing Day
On closing day, both parties will meet either in person or virtually to sign all the necessary documents and exchange funds. Once all the documents have been signed and the deed is recorded, the seller will receive the proceeds of the sale and the buyer will become the new legal owner of the property.
Step 7: Post-Closing Responsibilities
Even though the closing process has been completed, there will still be several post-closing responsibilities for both the buyer and seller. The seller is responsible for turning over the keys to the property and providing any necessary utility documents to the buyer. The buyer may also need to address certain property tax issues, such as adjusting their payment amount or setting up an escrow account.
Lien & Judgment Searches
When you are selling a home in Indy, the closing process can be complicated. One of the steps that can slow it down is something called a lien & judgment search. This is an important step of the closing process to make sure that no one else has any claim to the property you are trying to sell.
The search itself involves gathering information from various public sources and databases like court records, county records, tax records, and more. During the search, the buyer and their lawyer can discover if there are any legal claims attached to the property. These claims could include liens due to unpaid taxes, judgments due to lawsuits, or even mechanic’s liens from contractors who were not paid for their work.
The lien & judgment search is a necessary part of the closing process, as this information needs to be uncovered before the sale of the property can legally proceed. If these claims are discovered, they must be resolved before the close of escrow can happen. This discovery process can take time, which can slow the entire closing process.
It is important to understand that the lien & judgment search is a normal part of the closing process, and should not be a cause for concern. As long as all claims attached to the property are resolved and taken care of before closing, the sale of the property can proceed.
Transferring Fees & Taxes
When it comes to selling a home in Indy, there are various fees and taxes you will need to pay for transferring the title. In Indiana, the state has two transfer taxes: one general excise tax of $3 per thousand dollars of the sale price and one documentary fee of 50 cents per thousand of the sale price. It is important to note that the seller is typically responsible for paying these fees. Furthermore, it is also important to remember that there may be additional recording fees that need to be paid as part of the closing process.
For example, if you are selling a $250,000 home in Indy, you would be responsible for paying $750 in transfer taxes plus any other recording fees associated with the sale. Also, keep in mind that some cities and counties may have additional fees or taxes associated with title transfers.
To help with the title transfer process, you should work closely with your lawyer or realtor. They will be able to provide you with more information on the taxes and fees associated with transferring the title in Indy.
Conclusion
Selling a home in Indy can be an intimidating process, with a long list of legalities and considerations. The closing process requires careful attention to detail, from understanding the duties of your realtor to transferring taxes and fees at the end.
It’s important to know what to expect throughout the timeline of selling your home. This guide has outlined all the necessary steps involved, from the role of a title & adverse possession to the lien & judgment searches.
To make the process as smooth as possible, here are some actionable tips:
- Be sure to hire an experienced local realtor to help you negotiate the best possible terms of sale.
- If you’re selling an older home, make sure to have it thoroughly inspected beforehand.
- Do your research and be fully prepared for the closing costs associated with transferring the title.
- Be aware that lien or judgment searches can occur and cause delays in the closing process.
By following the steps laid out in this guide and using these tips, sellers in Indy can navigate the home closing process with ease. Though daunting, a successful closing is achievable if you are well informed and properly prepared.
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