Over the past few months, your listing agent has been your go-to person guiding you through every step of selling your home. During the period of showings, offers, and negotiations, you traded more texts and calls with your agent than with your own family members. But when it comes time to close on the sale of your home, you might be surprised to learn it isn’t the seller’s agent who runs the show.
So if closing isn’t conducted by the seller’s agent, who’s in charge? If you haven’t sold a house in a while — or ever — you likely need a refresher on what to expect when closing day rolls around. To help you prepare, we spoke with both an experienced real estate agent and a real estate attorney for the full picture on where closings take place, who’s likely to show up, and what their level of involvement will be.
What happens at closing?
The closing — also referred to as “settlement” — is when the title of your home passes from you to the buyer and the funds being held in a third-party escrow account are disbursed to the appropriate parties. While you may imagine everyone sitting around a closing table like a happy family signing paperwork together, buyers and sellers can actually sign their documents separately and at different times.
Because buyers typically have a bigger stack to work through, including the mortgage note, closing disclosure, and the lengthy deed of trust, it’s not uncommon for sellers to set up their own appointment or even sign their paperwork remotely with the help of an online notary — whatever makes sense for them.
Where is the closing usually held?
Depending on who is serving as the escrow agent, the closing may happen at the office of any of the following parties:
- Title company: In some cases, the title company verifying the legitimacy of the seller’s clear ownership of the property serves as the escrow agent for a real estate transaction and hosts the closing.
- Lender: In some parts of the country, closings can be held at the office of the mortgage lender who’s financing the buyer.
- Escrow company: Alternatively, an employee of the escrow company responsible for safely holding onto the transaction funds may coordinate the closing at their office.
- Real estate attorney: Some states require that a real estate attorney be present at closing, either to coordinate the entire process or to prepare specific documents.
But not all closings fall neatly into these four locations. Heather James, a real estate attorney whose firm is based in the Atlanta area, says closings can take place pretty much anywhere as long as the appropriate parties are present.
Her Georgia firm has handled closings in their own office, at Realtor® offices, and even in the homes of the buyer or seller. Her company has also closed transactions in a hospital and on the tailgate of a pickup truck, among other places. “During COVID, we’ve also done quite a few of what we call ‘curbside closings,’” she says. “We believe that in the future, flexibility will be key to meet everyone’s shifting expectations.”
Who attends the closing?
Depending on the regulations in your state and the venue for the closing, the cast of characters may consist of some or all of the following:
- The buyer and seller (often separately): George Herring, a top Texas agent, says that in his state, buyers and sellers don’t close at the same time. “Whenever possible, buyers close first,” he says. “That way, we know the financing has gone through and there are less likely to be last-minute snafus.”
- Buyer’s agent: Although it’s not always required for the buyer’s agent to be at the closing, they will often attend to help with any questions that may arise about the transaction and who agreed to what. This is also where the buyer’s agent often receives their portion of the real estate commission for the sale.
- Listing agent: While most of the listing agent’s responsibilities are handled prior to closing, Herring often attends his clients’ closings to provide moral support and help with any last-minute questions or issues for his seller client.
- Title company: Representatives from the title company will do a title search to make sure the seller is legally able to sell the property to the buyer, and then transfer the title to the buyer. The title company also provides title insurance, and often oversees the escrow accounts and handles the settlement process.
- Real estate attorney: Even if your state doesn’t require an attorney to be present, some buyers and sellers may opt to have a legal representative there to review the paperwork. An attorney can be especially useful in the event that you’re selling an inherited home, or if disputes arise over last-minute repairs to the home.
- Mortgage lender: A small segment of lenders choose to attend closings with buyers, but Herring says a majority of them don’t appear. He estimates that the lender is present at around 10% of his closings.
Closing regulations, state by state
Depending on where you live, state and local regulations may determine who runs your closing and requirements around who should be there. On his blog, real estate investor Seth Williams shares an interactive map that he created based on extensive research and discussions with closing agents across the country. You can hover over an individual state to see where closings are typically held and to find out whether the law requires a real estate attorney to be involved.
Here are examples of state-specific requirements or customs you may encounter:
- In Ohio, real estate transactions are usually closed by a title agency or attorney.
- In California, a home sale is typically closed by title companies, escrow agents, or lenders.
- In South Carolina and New York, real estate transactions must be closed by an attorney.
- In Colorado, closings are handled by title companies, brokers, and attorneys.
- In Illinois, real estate closings can be facilitated by title companies and lenders, but only attorneys can prepare closing documents.
As Williams points out in his blog, regulations can change from year to year, so be sure to check the current requirements in your state to make sure you’re prepared for the closing process.
The agent’s role in choosing the closing location
In Herring’s state of Texas, the title company usually handles the closing. Once a home goes under contract, the listing agent and buyer’s agent negotiate to decide who gets to choose the title company. “Ninety-five percent of the time in my experience, the seller pays the title policy, so the seller usually picks the title company,” he explains.
Herring notes that most agents prefer to use a company they’ve worked with before and are familiar with to reduce the chance of unwelcome hiccups or mistakes. “When working with a good title company, we know everything will be handled promptly, that all the documentation will be taken care of, and that they’ll keep us in the loop,” he says. “I always prefer to use my go-to title company, as I know that we will have a smooth transaction and will get great service.”
If you’re not sure what to expect at your upcoming closing — where it will be held, who will be there, or who will be in charge — the best place to start is with your real estate agent. They should be able to answer any questions and help you head to closing feeling comfortable and prepared.
Header Image Source: (Erik Mclean / Unsplash)