Closing is a term that's widely used to describe the end of the process of officially transferring a property from one party to another at the end of a sale. It's important to understand the legal implications of this moment, and you should consider having a real estate law firm involved with the closing process. Let's examine what some of the major implications of closing are from a legal viewpoint.
The buyer or their lender should have placed the money to complete the sale in escrow. After all the procedures are finished, such as completing a title search, performing an inspection, getting an appraisal, setting interest rates, and signing the paperwork, the buyer or the lender will release the money to the seller. From this point forward, if there is a mortgage against the property, the relationship is between the buyer and the lender and not the seller. Unless the seller committed fraud or misrepresented the property, they cease to be part of the financial side of the discussion because they're paid in full.
Warranty and Liability
When the final paperwork is signed and the money is released, whatever warranties and liabilities are attached to the property come into effect. From this point forward, if there is a complaint about the condition of the property due to pre-sale issues, the remedy is to pursue legal action against the seller.
This is one of the big reasons why it is critical for sellers to make complete disclosures about the property. If the roof has issues or there is an outstanding lien against the property, failing to disclose those problems may constitute a cause of action for the buyer to take the seller to court. In terms of what a seller is warranting about a property and the liability they're accepting, closing is the "speak now" moment. Otherwise, they may face legal blowback years down the road.
Closing is the moment where the buyer takes possession. This means the seller needs to hand over all copies of the keys that exist.
Likewise, it means the buyer is now able to assess the seller storage fees for any items that were left on the property and not transferred. If a seller needs to leave something on the property, it's best to make arrangements in writing and to pay the buyer a fee to activate the agreement. Without an agreement, the buyer will eventually have grounds to take possession of the items. Many sellers simply include items they don't want to move with the sale to avoid this issue.
To learn more, reach out to a local real estate law firm.