Texas Closing, Funding and Possession
The final stage in selling your home

Learn the Texas 3-Step: Closing, Funding and Possession

In Texas, home buyers and sellers typically finalize the sale of the home at a local Title Company per the agreed upon contract. This is called the Real Estate Closing.

The closing is a critical part of the home selling process. At the closing, your home will legally be transferred to the home buyer. Be prepared for a lot of paperwork. You'll be signing your name on a lot of documents during this process. Review the following points to help you prepare for your closing.

It's important to understand there are three main elements which may not happen all at the same time: Closing, Funding and Possession.

  • Closing is when the legal paperwork is signed at the Title Company.
  • Funding through the Title Company occurs when the buyer and seller both provide necessary funds per the contract and settlement.
  • Possession occurs per the agreed upon contract.

    • Prior to the Closing

  • Expect the buyer's lender to send an appraiser and / or a surveyor to check the real estate.
  • Gather all warranties and instruction books for your home's appliances or major systems and leave them in a kitchen drawer for the home buyer.
  • Once you have a closing date, notify the utility, telephone, water, trash and other services to advise them of your final billing date. Utility companies should make final meter readings on the day of closing.
  • Have repairs and other specifications completed according to the contract (with documentation, receipts) so that final inspections may take place.
  • Prior to closing, your buyer will want to make a final inspection (or walk-through) to see that the home is still in good condition. Never remove fixtures that are expected to stay with the home.
  • Look over any terms in the contract that state when the buyer will take possession. If you have not moved out by that date, the contract stipulates what will happen.

    • Closing Costs

  • Make sure you have an accurate copy of the closing costs before closing. This document is known as the hud, closing statement or settlement sheet and will contain most of the charges you may be asked to pay.
  • You may pay a loan discount fee or service fee. This fee - or points - is a percent of the mortgage amount and charged by the lender to adjust yield to reflect current market interest rates. For VA guaranteed loans, the seller pays the points. Otherwise, they're a negotiable item.
  • Depending on your contract negotiations, you probably agreed to pay for charges related to the title, such as title insurance or attorney's fees.
  • The buyer will likely pay the fee for recording the mortgage, while you as the seller may be asked to pay the transfer fee and the deed recording fee. Other fees, such as settlement agent fees, document preparation, notary services or warranty coverage, may be charged for preparation of closing. Your DFW Realty GMAC Real Estate Agent will help you understand which fees are your responsibility.
  • Typically in Texas, you as the seller, per the sales contract will pay the commission to the real estate brokers who your listing agent and the buyers agent work for. The agreed upon contract will spell this out.
  • After the balance you owe on your mortgage is subtracted from your proceeds, you also may pay a small charge to have the title cleared.
  • You will be responsible for paying your prorated share of property taxes and hazard insurance until the date of settlement. If these charges have been paid from an escrow account, you may still have money in your account. Or, if the charges have already been paid in advance, you may receive money back from your lender.

    • The Closing

  • Your agreed upon contract specifies the local Title Company you will use to close.
  • The closing date is specified in your contract but often this date moves a bit to a mutually convenient day and can be changed if there are issues with clear title or funding.
  • There are two separate closing that occur at different times. The Home Sellers Closing and the Home Buyers Closing. You and your Realtor will book a time of day with the Title Company for your closing. The home buyers will not be present at your closing. Buyers have their own closing time either before or after yours.
  • Closings involve more than one settlement activity: closing the property transaction, funding the buyer's loan and your mortgage, and possession.
  • Any issues or questions should be resolved before closing so that both parties can simply review and sign each document.
  • Your Hitz Team Realtor will work with you ahead of time to facilitate providing any closing paperwork that the contract has called for you to supply, such as a survey.
  • You will sign over the deed to the buyer to convey the title to the property. You will also review and sign the final version of the settlement statement.

    • Funding

    Most Texas home buyers purchase a home using one or two lenders to finance the real estate they are buying. The monies are wire transferred from the lender(s) to the title company AFTER final approval of the paperwork by loan underwriters NOT the loan officer, banker or mortgage broker the buyer has been working with. The buyers loan underwriters are the key players nobody sees who make the closing smooth or rough. The title company wants the closing and funding to go smoothly so they work in advance and during closing with the underwriters to provide the necessary paperwork to achieve underwriter approval and funding. It's not uncommon for the closing paperwork to be signed by both buyer and seller but funding to occur after close of business.

    Possession

    Typically when everything goes smoothly, possession occurs the same day after closing and funding. However, Possession is a term in the contract between the buyer and seller so possession is whatever you agreed upon. Depending upon move schedules, buyers and sellers may contractually agree to possession occurring before or after closing.

    Sold

    The moment you've been waiting for - You've sold your house. Possession: At the closing your Realtor will turn over the keys, garage door openers, etc to the Title Company who will transfer them, after both closings and funding, to the buyer. Funding: The Title company receives and disperses the funds. You will be given a check you can take straight to the bank (or it's already wire transferred into your account).

    The home selling process may seem lengthy and complicated at times, but your Hitz Team DFW Realty GMAC Real Estate Agent is here to guide you through the process. You can trust in the Premier Service of GMAC Real Estate.

    Clients ask how Realtors gets paid for their services. The simple answer is that we get paid after everybody else. The Title Company, after funding, per the listing agreement and sales contract, provides commission checks to the Real Estate Brokers. The broker then disperses a commission to the agent.

    Contact Mark Hitz, Realtor, DFW Realty today for your Real Estate Needs. If you are thinking of selling a home, or want to talk with an expert Real Estate Agent with detailed knowledge the local Real Estate Market, please feel free to contact us. Simply call Mark Hitz at 214-514-1800, or e-mail us. We'll be glad to talk with you, and help you in all of your Real Estate needs.

    The information provide above concerning closing, funding, possession, loans, underwriters and title company roles is personal commentary and should not be taken as fact. Why? The Texas Real Estate Commission who licenses Texas real estate agents is very clear about informing clients that even as Texas Realtors, we are licensed as real estate salesmen and are: not Texas licensed attorneys giving any legal advice or binding legal information; not Texas licensed home inspectors, not appraisers, not surveyors, not loan officers, bankers or underwriters and are not title company representatives.