What happens at closing when you sell your house for cash

Who runs the closing in a cash sale?

In a cash sale the closing is handled by a licensed title company. It is a neutral party between you and the buyer. It holds the earnest deposit, checks the title, collects the payoff figures, prepares the closing statement, has the deed signed and recorded, and pays everyone from the sale.

In a sale to BIMINIO a licensed title company handles the paperwork, and your earnest deposit is held by that company. We pay the closing costs.

Step 1: the signed purchase agreement

The sale starts when both sides sign a written purchase agreement. BIMINIO's terms say that any offer is an estimate until both parties sign that agreement, and that a form or a phone call does not create a contract.

In Florida, a contract for the sale of any building must carry the state's radon gas notice, or the notice must be on another document signed at or before the contract (Florida Statutes, section 404.056(5)). It tells the buyer that radon has been found in buildings in Florida and where to get more information.

Step 2: the earnest deposit

The buyer puts down an earnest deposit with the title company. It shows the buyer is serious, and it is credited toward the price at closing.

Check who holds it. It should be a licensed title or escrow company, and never the buyer's own account.

Step 3: the title search

The title company searches the public records for anything that affects ownership: mortgages, home equity loans, tax liens, contractor liens, code fines, judgments, and the names on the title.

Every owner on the title usually needs to sign. If someone on the title has died, or a divorce changed ownership, the title company tells you what papers it needs.

• Mortgages and home equity loans
• Unpaid property taxes
• Code enforcement fines and city liens
• Contractor and HOA liens
• Court judgments against an owner

Step 4: payoff letters

The title company asks each lender and lien holder for a payoff letter: the exact amount needed to clear the debt on the closing day. You do not pay these yourself. They are paid from the sale.

Give the title company your loan numbers early. A late payoff letter is a common reason for a closing to move.

Step 5: the walk-through

With BIMINIO there is one building inspection after you accept the offer. It takes under 30 minutes, at a time you choose. The price in the written offer is the price at closing.

Step 6: the closing statement

Before closing you get a closing statement, sometimes called a settlement statement. It lists the price, every payoff, every cost, and the amount you will receive. Read it line by line and ask about anything you do not understand.

See each seller closing cost in Florida and Arizona, line by line →

Step 7: signing and recording the deed

At closing you sign the deed and the other papers. You can sign at the title company's office, or the title company can plan a signing where you are.

The title company then records the deed with the county. In Arizona a deed is recorded with an affidavit of legal value signed by the seller and the buyer, and the county recorder will refuse a deed without a complete affidavit unless an exemption applies (Arizona Revised Statutes, section 11-1133).

Step 8: getting paid

Once the papers are signed and the money is in, the title company pays the lenders and lien holders and sends the rest to you, by wire or check. Ask the title company how and when it pays, and confirm wire details by phone with a number you already know. Never trust new bank details sent by email.

How long does a cash sale take to close?

With BIMINIO you pick a closing date from 7 to 35 days after you accept. The shortest closings happen when the title is clear and the payoff letters come back fast. Liens, probate papers or missing owners can take longer, so tell us about them on the first call.

Papers to gather before closing

The title company tells you exactly what it needs. These are the papers it asks for most often. Gathering them early helps you close on the date you picked.

• A photo ID for every owner who will sign.
• Mortgage and home equity loan numbers, and lender contact details.
• Your HOA or condo association contact, if there is one.
• Leases and security deposit records, if the house is rented.
• Probate court papers, a death certificate, or divorce papers, if they affect the title.
• A recent property tax bill.
• Keys, garage remotes and gate codes, for the closing day.

What can delay a closing?

Most delays come from paperwork. Telling the title company about these early is the best way to avoid them.

• A lender that is slow to send a payoff letter.
• A lien nobody knew about, found in the title search.
• An owner on the title who cannot be reached, or who has died.
• Probate papers that are not ready.
• Missing HOA paperwork.

After closing

Once the title company confirms the sale has closed and you are paid, a few tasks are left. Keep your copy of the closing statement and the signed papers in a safe place. You may need them when you file taxes for the year of the sale, so ask your tax adviser what to keep.

• Cancel your homeowner's insurance and ask for any refund.
• Stop or transfer electricity, water, gas, trash and internet.
• Forward your mail.
• Watch for a refund of any money left in your mortgage escrow account.